Abstract:
The objectives of this research are to find out degree of Ownership concentration and
to identify the relationship between Ownership Concentration and company
performance using data of 62 listed companies in Colombo stock exchange (CSE)
over the period of 2013 – 2014. This research has used only secondary data and
main source of data include the annual report of the selected companies. Empirical
research was conducted based on the 130 observations and findings base on the.
Data are analyzed by using ordinary least square (OLS) regression as pooled data
analysis with year dummy variable. Herfindal index (HHI) variable, percentage shares
held by the largest shareholder (SH 1) variable and percentage shares held by top
10 largest shareholders (SH 10) variable to measure the Ownership concentration
are the independent variable. Return on assets (ROA) use as a dependent variable
to the model and other than to the Concentration variables, Liquidity, Leverage, and
Age of the company, Total assets and Total sales use as a control variable to the
model. Based on the Ownership concentration variables – HHI, SH(1) and SH(10)
identified that Sri Lankan companies are having a high degree of ownership
concentration and this high degree of ownership concentration does not have
statistically significant relationship with company performances i.e. listed firms which
having high degree of ownership concentration does not have any relationship with
achieving company performance. However the explanatory power of the overall
model (R2 value) is below the average and further research are necessary to increase
the explanatory power of the overall model.
