The effects of ownership structure on firma performance

The study describes the main characteristics of ownership structure of the Turkish non- financial firms listed in the Istanbul Stock Exchange (ISE) from 2000 to 2002 and examines the impacts of ownership structure on performance of Turkish firms. Ownership structure is consists of two attributes: concentration and identity of the owners. These corporations can be characterized as highly concentrated, a group of companies generally owned by the largest shareholder or largest tree shareholders. It has been concluded that managerial, affiliated and foreign ownership structure of the Turkish firms are lower than developed economics where as state ownership structure is higher. It has been examined the impact of ownership structure on performance by cross- section and panel data analysis. Results showed that unobserved firm and sector heterogeneities explain reasonably well variations in ownership structure. Especially, ownership-performance relation is assumed to be bilateral not unilateral, so endogenous assumption for ownership variables is taking into account. While ownership concentration is endogenously determined by firm's market performance, it is exogenous variable in terms of accounting performance. It has been founded that ownership concentration increases in performance and this effect is nonlinear for small shareholders whereas linear for largest shareholders. Besides, managerial and affiliated ownership generally affected a nonlinear shape on firm performance. Managerial ownership is endogenously decreasing effects on firm performance. Affiliated ownership is exogenously affected on performance. However foreign ownership is endogenously variable, and increase on performance. Furthermore, state ownership is an exogenous variable but its effect on performance is insignificant. It has been founded that changes in firm's environment determines small shareholders, managerial, foreign ownership and performance partially. X