Ownership Structure and Firm Performance: A Comprehensive Review and Empirical Analysis

Ownership structure and firm performance are the two important ingredients for a firm to sustain in the market for a prolonged time. Ample research has statistically proven the significant impact of ownership structure on firm performance. Ergo, this study aims to critically review and analyse the mechanisms of ownership structure (OS) and their impact on the firm performance (FP) with the help of content analysis and systematic literature review (SLR). This study used the combined literature from Scopus and Web of Science databases from 1977 to 2022. A total of 552 relevant documents have been extracted, out of which 40 documents were found suitable based on inclusion and exclusion criteria using the Preferred Reporting Items for Systematic Reviews and Meta-Analysis (PRISMA) framework of SLR has been applied using R studio software. Major findings of the study revealed that ownership concentration was found significant in affecting firm performance. However, other mechanisms such as managerial ownership, government ownership, institutional ownership, foreign ownership and family ownership showed mixed results such as positive, negative or insignificant. This study on the one side contributes to the existing literature and also helps the policymakers in maximising the performance of the firm by suggesting ways to reduce conflicts of interest between managers and shareholders and will also be significant to the practitioners, scholars and managers in comprehending dynamics of corporate governance practices. Further, it will help investors give special consideration to a particular type of ownership structure while making investment decisions.