Ownership and Corporate Performance in European Frontier Markets

Abstract

This study investigates the influence of ownership on financial performance of listed companies from the European frontier markets, considering three dimensions: concentration of strategic shareholders, diversity, and ownership structure (strategic foreign, local, state, and free float). The results of panel regression estimations indicate that ownership concentration and local shareholders have a positive effect on market performance, as measured by Tobin's Q, whereas ownership diversity has a negative effect. No significant evidence was found regarding the influence of ownership on financial performance measured on accounting basis, as return-on-assets (ROA). These findings reveal characteristics of corporate ownership in the European frontier markets.