Open AccessExploring non-linear relationship between foreign ownership and firm performance
Author(s) -
Neeraj Gupta,
Tarun Agarwal,
Bhagwan Jagwani
Publication year - 2021
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv18i3siart3
Subject(s) - foreign ownership , business , shareholder , panel data , positive relationship , fixed effects model , linear relationship , monetary economics , foreign direct investment , accounting , corporate governance , econometrics , economics , finance , macroeconomics , statistics , psychology , social psychology , mathematics
This study aims to examine the impact of foreign ownership on the performance of Indian firms. Additionally, it also analyses the non-linear relationship of foreign ownership with firm performance. A panel data approach has been used in this study. Specifically, the fixed effect estimation technique is used to examine the relationship between foreign ownership and firm performance during the period 2009–2010 to 2018–2019. The foreign institutional shareholders and the foreign corporate bodies hold more shareholding than the foreign individual investors. The authors find that foreign institutional investors and foreign corporate bodies bear a positive relationship with the performance of Indian firms. Additionally, foreign ownership shows a non-linear relationship with firm performance. The results are robust across the various proxies of firm performance, and sub-samples based on foreign ownership