The influence of ownership structure on corporation performance: Evidence from Saudi listed corporations

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Abstract

The significance of a company’s ownership structure (OST) is reflected in how it impacts the process of making decisions and the allocation of profits within the organization. Based on that, this article aims to inspect the connection between OST and corporation performance (CP). The current study employed an empirical strategy that entailed the development of comprehensive ordinary least squares (OLS) measures, which were then applied to a sample of 199 financial and non-financial firms listed on the Saudi market between the years 2015 and 2021, amounting to a total of 1393 observations. The statistical findings supported the impact of managerial ownership (MGOW), institutional ownership (INOW) and government ownership (GOOW) on CP. On the contrary, foreign ownership (FOOW) and ownership concentration (OWCO) have a negatively significant relationship with CP. This article is one of the few empirical studies that look at how OST affects CP. In addition, it is the first study in the Kingdom of Saudi Arabia (KSA) that examines the impact of the OST components (administrative, institutional, foreign, governmental ownership, and ownership concentration) on the performance of companies in all sectors of financial and non-financial companies.

Keywords: Managerial Ownership, Institutional Ownership, Foreign Ownership, Government Ownership, Ownership Concentration, Corporation Performance

Authors’ individual contribution: Conceptualization — T.F.A. and N.H.A.A.; Methodology — E.M.A.-M. and M.H.M.; Software — E.M.A.-M.; Validation — T.F.A. and M.H.M.; Formal Analysis — T.F.A. and E.M.A.-M.; Investigation — M.H.M.; Resources — T.F.A.; Data Curation — T.F.A. and N.H.A.A.; Writing — Original Draft — T.F.A., E.M.A.-M., M.H.M., and N.H.A.A.; Writing — Review & Editing — T.F.A., E.M.A.-M., M.H.M., and N.H.A.A.; Visualization — T.F.A., E.M.A.-M., M.H.M., and N.H.A.A.; Supervision — T.F.A. and E.M.A.-M.; Project Administration — E.M.A.-M.; Funding Acquisition — T.F.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, G32, L25

Received: 15.10.2023
Accepted: 18.03.2024
Published online: 21.03.2024

How to cite this paper: Alruwaili, T. F., Al-Matari, E. M., Mgammal, M. H., & Alnor, N. H. A. (2024). The influence of ownership structure on corporation performance: Evidence from Saudi listed corporations [Special issue]. Corporate & Business Strategy Review, 5(1), 450–462. https://doi.org/10.22495/cbsrv5i1siart18