Does ownership structure affect firm performance? Evidence from a continental-type governance system

Abstract

This paper analyzes the influence of stock ownership structure on firm performance in Spain, a country characterised by the dominance of internal mechanisms of control and a weak external control performed by the markets. Once the possible endogeneity of managerial stock ownership is taken into account, we find no evidence of its influence on firm's performance. This result is consistent with previous evidence for Anglo-Saxon economies. Consistently with the supervisory role of the large shareholders we find also evidence of a positive effect of stock ownership concentration on firm performance. Nevertheless, we have to be cautious relating this result as its significance depends on the firm's size.