Ownership Structure and Firm Performance: Evidence from a Non-Parametric Panel

This paper considers the effect on performance of very large controlling shareholders, who are mostly organized in voting blocks and business groups, in a sample of Belgian listed firms from 1991 to 2006. We use a non-parametric panel data analysis, which is a new technique that does not impose functional restrictions on the relation between ownership and performance. While parametric results indicate a negative effect of large shareholders on firm performance for non-family firms, non-parametric analysis shows that the effect on performance varies depending on the size of ownership stakes.