Ownership Structure and Stock Price Performance During Turbulent Financial Markets
The objective of this study is to investigate the relationship between stock market performance and ownership structure during plummeting and soaring financial markets in a Continental-European setting. Our results show the importance of ownership concentration, the presence of secondary blockholders and the type of the controlling owner to explain stock price performance. In addition, the analysis shows that the results for extreme down markets are fundamentally different from the results for the up market. While ownership concentration is valued positively during down market periods, it is valued negatively during up market periods. The results of the study also have implications for policy makers, by showing that firms with concentrated ownership are less subjective to extreme market periods. To the extent that ownership concentration might contribute to the financial and economic stability of listed firms, this study provides empirical insights against regulations that could hamper the persistence of large controlling shareholders