DOES MULTI-DIMENSIONAL OWNERSHIP STRUCTURE MATTER IN FIRM PERFORMANCE? A DYNAMIC FIRM’S LIFE CYCLE PERSPECTIVE

Prior studies on the relationship between ownership and firm performance have produced mixed results; hence, this paper re-examines the relationship using an unbalanced panel pooled sample of 4,443 observations listed in the emerging Taiwanese market. We adopt a dynamic perspective to explore the persistence of the relationship across the life cycle stages of firms over time. Does the impact of ownership on firm performance vary at different life cycle stages? Does it persist across the stages over time? Our empirical results suggest a potential nonlinear relationship between ownership and performance. Furthermore, evidence shows that the impact of ownership on performance is a function of the life cycle effect, where the impact is more pronounced among mature firms over the same period. However, the case is not the same across different periods. To alleviate a potential simultaneity issue, we lag all measures of ownership structure by one year in the fixed-effect regressions framework of panel data. Overall, this paper contributes to ongoing research by extending the importance of the life cycle stages of firms in assessing the impact of ownership on firm performance over time.