SHARE OWNERSHIP STRUCTURE AND
Corporate finance literature abounds with research on the effect of share ownershipstructure on company performance. The bulk of this literature is in the context ofdeveloped countries and very little research covers the South African market. Someof the literature suggests that company performance can be improved by asubstantial increase in institutional ownership, premised on the belief that suchownership is associated with better corporate governance. This notion is refuted bysome researchers, arguing that ownership structure is rather an endogenous result ofdecisions that reflect the influence of shareholders and of trading on the market ofstocks.Using the event study methodology, this research examines the effect of significantincreases in institutional ownership - using pension funds as a proxy for suchownership - on the share price performance of selected companies on the JSESecurities Exchange (JSE).The outcome of this research suggests that a significant increase in institutionalownership on the JSE is associated with poor share price performance, which doesnot support existing literature
Year of publication: |
2011-05-19
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Authors: | Mogaladi, Yoran |
Subject: | Johannesburg Securities Exchange | Share ownership | Share price performance |
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