The Effect of Ownership Structure on the Corporate Financial Performance in Tehran Stock Exchange: a Dynamic Panel Data Analysis

Document Type : Original Article

Authors

1 M.Sc. in Financial Engineering and Risk Management, Allameh Tabataba'i University, Tehran, Iran.

2 Associate Prof., Department of Finance and banking, University of Allame Tabataba’i, Tehran, Iran

3 Assistant Prof, Department of Finance and banking, University of Allame Tabataba’i, Tehran, Iran

Abstract

The developmentof a new system of corporate governance after the collapse of Enron and WorldCom in the early years of the 21st century at the global level and the acceleration of the process of handing over government assets simultaneously with the development of the capital market and the strengthening of institutional investment at the country level, the issue of ownership and its impact has made the performance of companies a controversial topic in the field of financial literacy. The purpose of this research is to investigate the relationship between the ownership structure and the financial performance of companies listed in the Tehran Stock Exchange. Based on this, the research investigated the effect of the relationship between institutional and government ownership on the financial performance of 146 listed companies on the Tehran Stock Exchange from 2012 to 2021 using the dynamic panel(Panel GMM) method. The research results indicate the positive effect of institutional ownership on the performance of sample companies. Also, performance metrics based on accounting information show a significant and negative relationship between government ownership and company performance. Other findings of the research show the positive effect of financial leverage and the positive view of shareholders towards the shares of large and growing companies in evaluating the company's financial performance

Keywords

References

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Financial Management Perspective
Volume 13, Issue 42
July 2023
Pages 63-90

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