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Hidden Ownership and Firm Performance: Evidence from Thailand’s Initial Public Offering Firms

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  • Natthawut Wangwan

    (Department of Finance, Faculty of Commerce and Accountancy, Thammasat University, Bangkok 10200, Thailand)

  • Arnat Leemakdej

    (Department of Finance, Faculty of Commerce and Accountancy, Thammasat University, Bangkok 10200, Thailand)

Abstract

Previous studies have overlooked hidden ownership in their analysis, which could result in biased findings. This research utilizes unique data sources to uncover hidden ownership patterns and employs ordinary least square regression to investigate the relationship between hidden ownership and firm performance. The findings indicate that hidden ownership affects a firm’s performance, but not in the same manner as previously thought. Firms with hidden ownership actually perform better than those without. These results contradict the belief that hidden ownership leads to wealth expropriation from minority shareholders and negatively impacts a firm’s performance. The study also remains robust after accounting for potential endogeneity using an instrumental variable approach. The findings provide policy implications and contribute to the ownership and firm performance literatures.

Suggested Citation

  • Natthawut Wangwan & Arnat Leemakdej, 2023. "Hidden Ownership and Firm Performance: Evidence from Thailand’s Initial Public Offering Firms," IJFS, MDPI, vol. 11(3), pages 1-16, September.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:3:p:107-:d:1232595
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    References listed on IDEAS

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    4. Ashraf, Rasha & Li, Huimin & Ryan, Harley E., 2020. "Dual agency problems in family firms: Evidence from director elections," Journal of Corporate Finance, Elsevier, vol. 62(C).
    5. Demsetz, Harold & Villalonga, Belen, 2001. "Ownership structure and corporate performance," Journal of Corporate Finance, Elsevier, vol. 7(3), pages 209-233, September.
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