Implications of Shareholder Types on Financial Performance: Empirical Evidence from Listed Companies in Kenya
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Date
2011Author
Ongore, Vincent O
K’Obonyo, Peter O
Ogutu, Martin
Type
ArticleLanguage
enMetadata
Show full item recordAbstract
Scholarly interest in the relationship between shareholder types and firm performance has been
evident since the seminal work of Berle and Means of 1932. The many researches so far conducted have,
however failed to give conclusive results. The study whose results are reported in this paper therefore, sought to
address the glaring knowledge gap, especially with regard to developing countries. The typical shareholder types
among listed companies in Kenya are government; foreigners; institutions; managers; and diverse shareholders.
Using Logistic Regression, the relationships between shareholder types and financial performance as measured
by ROA, ROE and DY were tested. The results indicate a significant negative relationship between state
ownership of firms and financial performance. On the other hand, foreign, insider, diverse and institutional
ownership gave significant positive relationships with financial performance. Collectively, these results are
consistent with pertinent literature with regard to the implications of government, foreign, manager (insider) and
institutional ownership forms, but significantly differ concerning the effects of diverse ownership on financial
performance.
Citation
Interdisciplinary Review of Economics and Management 1,1 (2011)Publisher
School of Business
Collections
- Faculty of Health Sciences (FHS) [10377]