Dr Manohar Goel
Abstract:
Corporate governance has gained prominence since the advent of globalization and liberalization. Global enterprises were allowed in, which increased competition for local businesses. Good governance procedures and laws are becoming increasingly important in improving performance in order to survive and acquire competitive advantages. The current study examines global literature on the relationship between ownership structure, a corporate governance tool, and firm performance. The study contributes to the body of literature by explaining the concept of ownership structure and how it relates to firm performance. Previous research has shown inconsistent findings, revealing a complicated relationship between ownership structure and firm performance.However, the majority of the studies emphasize that ownership concentration has a significant impact on the performance of the firm and should be balanced in order to remove agency cost problems that arise due to the separation of ownership and control. The study may facilitate policymakers in framing policies regarding the system of governance, and investors can estimate their potential investment horizons by considering different ownership structures and their relationship with firm performance as per their purpose of investing. However, the present study has some limitations, such as; it focuses on a single mechanism of corporate governance rather than focusing on other indicators; also, due to a lack of empirical testing, it lacks accurate results. Future research can be conducted by examining other mechanisms of corporate governance like board composition, board size, CEO duality etc.; also, empirical testing of data can be done in order to attain accurate results.
