Ownership Structure and Firm Performance- Evidence from Indian Firms

The purpose of present study is to empirically investigate the effect of ownership structure, and ownership concentration on financial performance of companies in India. The study examines the cross-sectional variation in Tobin's Q with respect to changes in ownership structure and its concentration for top 100 companies listed on N SE as on 31st March 2016. Durbin Wu Hausman test is applied to test whether ownership variables are endogenously determined or not. The results of DWH test did not document any evidence of endogeneity of ownership. Ordinary least square regression technique is employed to analyze the data. The study finds no significant relationship between ownership structure (promoters' shareholding and non-promoters' shareholding) and Tobin's Q. there is also no significant relationship between ownership concentration and TOBIN'S Q. The findings of the study are in line with the arguments of Demsetz (1983).