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Promoter Ownership in Publicly Listed Firms in India: Does Group Affiliation Matter?

Richter, Ansgar and Chakraborty, Indrani (2015) Promoter Ownership in Publicly Listed Firms in India: Does Group Affiliation Matter? [Working Paper]

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Abstract

Many of the largest Indian firms are characterized by promoter ownership, a hybrid form of ownership and governance in which the companies’ founders or their heirs hold controlling stakes, while inviting external minority shareholders to contribute capital, and outside managers to participate in the day-to-day administration of the companies concerned. We analyze a sample of 360 publicly quoted firms with promoter ownership in India during the 2006-2013 period. We find that in group-affiliated firms, the level of promoter ownership is positively associated with capital market performance, whereas in stand-alone firms there is a U-shaped relationship between promoter ownership and capital market performance. There are only minor performance differences between group-affiliated and stand-alone firms, once other performance determinants are controlled for. Our findings cast doubt on the idea that group affiliation in promoter-owned firms allows promoters to extract value for themselves at the expense of outside shareholders.

Item Type: Working Paper
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
NameEmailORCID
Richter, Ansgara.richter@surrey.ac.ukUNSPECIFIED
Chakraborty, IndraniUNSPECIFIEDUNSPECIFIED
Date : February 2015
Related URLs :
Depositing User : Clive Harris
Date Deposited : 15 Dec 2017 10:21
Last Modified : 15 Dec 2017 10:27
URI: http://epubs.surrey.ac.uk/id/eprint/845292

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