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Volume 28 Number 3 December 2003
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The Relationship Between Ownership Structure and Performance in Listed Australian Companies
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Emma Welch
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Abstract
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This paper examines the relationship between ownership
structure and corporate performance in Australian listed
companies. The study applies the models advanced by
Demsetz and Villalonga (2001), examining the relationship
between ownership and performance when ownership is modelled
as a multi-dimensional endogenously determined variable.
OLS results suggest that ownership is significant in
explaining performance. However, when endogeneity is taken
into account, ownership is not statisticaly dependent
on the performance measure. Finally, previous research by
authors including Morck, Schleifer and Vishny (1988) suggests
that the relationship between ownership and performance is
nonlinear. We fit a generalised nonlinear model that nests
models advanced previously. Results provide limited
evidence of a nonlinear relationship between managerial
share ownership and firm performance.
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Download this article.
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Keywords
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OWNERSHIP STRUCTURE; PERFORMANCE; ENDOGENEITY OF
OWNERSHIP STRUCTURE; NONLINEARITY.
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Contact Details
Emma Welch
School of Finance and Applied Statistics
Australian National University
Canberra ACT 0200
E-mail: Emma.Welch@anu.edu.au
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Comments and suggestions made by Richard Heaney,
Michael Martin and Tom Smith are gratefully
acknowledged.
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