The power of a single large shareholder in iberian firms: friend or foe?
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Data
2017-02-02
Autores
Orientador(res)
Rochman, Ricardo Ratner
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Resumo
Agency costs as a result of the separation of ownership and control within a firm can be a hurdle to the performance and profitability. It has been suggested that these costs can be reduced by the presence of a single large shareholder monitoring management and their decisions. On the contrary it has also been argued that a large shareholder negatively affects firm performance by deriving personal benefits from the firm and making suboptimal decisions. This research aims to investigate the relationship between the profitability of a firm and the level to which the shares of that firm are concentrated into a single shareholder. A random effects GLS panel regression is used to determine the effect of a large shareholder being present in Spanish and Portuguese firms by studying firms listed on these bourses over the period 2005 – 2014. The results show that a large shareholder has a negative influence in the Portuguese market, and no statistically significant effect in the Spanish market