The effect of ownership structure on firm performance : a study of Norwegian listed firms

Abstract

This paper empirically investigates the relationship between ownership structure and firm performance, treating ownership concentration and owner identity as separate, but dependent dimensions of ownership structure. We use a large sample of quarterly data from non-financial companies at the Oslo Stock Exchange in the period 2001-2007. Using three different econometric approaches motivated by previous studies, we cannot conclude (econometrically) that ownership concentration influences firm performance, measured by Tobin’s Q. These findings are in line with previous research on Norwegian data. However, our results on owner identity differ. We find that when international investors hold large fractions of the stocks, or an international owner is the largest shareholder, firm performance is positively affected. The corresponding relationship between government ownership and firm performance is negative. Our findings therefore indicate that including owner identity as a dimension of ownership concentration could increase the insights into the relationship between ownership structure and firm performance.