The Effect Of Ownership Structure On Firm's Performance

The fact that organization ownership differs from one firm to another,is considered as an important corporate governance mechanism to improve firm efficiency.Therefore this study aims to investigate the effect of ownership structure on firm performance in Cote D'ivoire.This paper selected 25 Ivorian non-financial listed firms on the Regional stock exchange(BRVM)as sample data.The study covered the period 2008-2016.Return on assets and Tobin's q as considered as measures of firm performance.Ownership structure is divided into two aspects as Ownership concentration and ownership identity.Ownership concentration measures the percentage of shares held by the largest shareholder.Ownership identity was considered as foreign ownership,state ownership,institutional and family ownership.Also others firm performance influential factors like leverage firm size and firm age were also considered.ROA(return on assets)and Tobin's q regression analysis were performed using an Ordinary Least Squares(OLS)estimator.The results reveal that ownership concentration is insignificant when measured by ROA and negatively significant related to firm performance measured by Tobin's q.Ownership identity illustrated by foreign ownership,State ownership is positively non significant with firm performance measured by ROA,however negatively significant measures by Tobin's q.Institutional ownership and family ownership are positively related to ROA but negatively significant with Tobin s q.The overall result shows a negative impact of ownership structure on firm performance supporting the entrenchment hypothesis.This evidence suggests that a more dispersed ownership structure should enhance firm performance in Cote d'ivoire and reduce conflict of interest.