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Institutional ownership and firm performance: evidence from Indian panel data

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  • Ruchi Kansil
  • Archana Singh

Abstract

The objective of this paper is to investigate the interdependent and interaction of institutional ownership and firm performance in an emerging market using Indian panel data. Two stage simultaneous equations - pooled and panel instrumental regression analysis is applied to the dataset that includes publicly listed Indian non-financial firms listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) as on 31 March 2014. A strong evidence of interrelation between institutional ownership and firm performance is evidenced in the Indian context. The results of fixed effect model confirm the relationship between firm performance and institutional ownership. Leverage and asset structure are joint determinants of firm performance and institutional ownership. However, firm performance impacts institutional ownership in the Indian context and not vice versa. The findings of the study could serve as guidelines for policy makers, institutional investors and the Indian corporate.

Suggested Citation

  • Ruchi Kansil & Archana Singh, 2018. "Institutional ownership and firm performance: evidence from Indian panel data," International Journal of Business and Emerging Markets, Inderscience Enterprises Ltd, vol. 10(3), pages 250-269.
    • Handle: RePEc:ids:ijbema:v:10:y:2018:i:3:p:250-269
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    Citations

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    Cited by:

    1. Shafiqul Alam & Sumon Kumar Das & Umma Rumman Dipa & Syed Zabid Hossain, 2024. "Predicting financial distress through ownership pattern: dynamics of financial resilience of Bangladesh," Future Business Journal, Springer, vol. 10(1), pages 1-19, December.
    2. Syeda Humayra Abedin & Humaira Haque & Tanjina Shahjahan & Md Nurul Kabir, 2022. "Institutional Ownership and Firm Performance: Evidence from an Emerging Economy," JRFM, MDPI, vol. 15(12), pages 1-17, November.
    3. Jia Jia Hing & Yee Peng Chow, 2022. "Influence of institutional investor heterogeneity on stock liquidity and its underlying liquidity channels," International Journal of Business and Emerging Markets, Inderscience Enterprises Ltd, vol. 14(3), pages 252-278.
    4. Xiaojian Hu & Gang Yao & Taiyun Zhou, 2022. "Does ownership structure affect the optimal capital structure? A PSTR model for China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2458-2480, April.
    5. Mohammad Abdullah Fayad Altawalbeh, 2020. "Corporate Governance Mechanisms and Firm’s Performance: Evidence from Jordan," Accounting and Finance Research, Sciedu Press, vol. 9(2), pages 1-11, May.
    6. Hasanudin Hasanudin & Andini Nurwulandari & I. Made Adnyana & Novi Loviana, 2020. "The Effect of Ownership and Financial Performance on Firm Value of Oil and Gas Mining Companies in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 103-109.
    7. Kumar Manaswi & Archana Singh & Vikas Gupta, 2023. "Building a Better Future with Sustainable Investments: Insights from Recent Research," Indian Journal of Human Development, , vol. 17(2), pages 320-343, August.

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