Published Online:January 2026
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG010126
DOI:10.71329/IUPJCG/2026.25.1.5-26
Author Name:Vishnu Kumar Mahawar and Shilpa Lodha
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:5-26
This study explores a crucial topic in corporate governance and finance: the complex relationship between ownership structure and firm performance. Ownership structure, which is the allocation of ownership rights among different stakeholders, has an enormous impact on a company’s overall profitability, strategic decision-making, and operational effectiveness. The study period is 10 years (2015-2024) based on 4380 firm-year observations of firms listed on NSE 500 index. It takes into account three performance metrics: return on equity (ROE), return on assets (ROA), and Tobin’s Q (TQ). Four main ownership groups are analyzed: Indian promoters (IP), foreign promoters (FP), institutional ownership (IO), and government ownership (GO). Using panel data regression models, the empirical findings suggest that Indian promoters mainly have a significant relation with all the profitability models, while foreign promoters only show a positive relation in the ROA and ROE model. Firm size also significantly impacted all the models, while no relation is found between sales growth and leverage on firm performance.
A company’s ownership structure influences its strategic decisions, operational efficiency, and overall performance. It refers to how equity ownership is distributed among various stakeholders, including individual investors, institutional investors, family owners, and government bodies (Sarkar, 2010). This structure affects the alignment of interests between owners and managers, the level of decision-making control, and the firm’s access to resources and knowledge (Bedo & Acs, 2007).