Institutional ownership, liquidity and firm performance

The study of the relationship between corporate governance and financial performance is an ambiguous theme. Several studies have focused on this topic by defining a relationship between the firm performance and its ownership structure. However, empirical findings did not reach a consensus on the determinants of this relationship. This paper aims to investigate the impact of institutional ownership on the firm performance using a sample of 100 French start-ups for a period from 2004 to 2006. Our findings reveal that market liquidity significantly affects the relationship between institutions' shareholding and firm performance.