SHARE OWNERSHIP STRUCTURE AND
Date
2011-05-19
Authors
Mogaladi, Yoran
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Abstract
Corporate finance literature abounds with research on the effect of share ownership
structure on company performance. The bulk of this literature is in the context of
developed countries and very little research covers the South African market. Some
of the literature suggests that company performance can be improved by a
substantial increase in institutional ownership, premised on the belief that such
ownership is associated with better corporate governance. This notion is refuted by
some researchers, arguing that ownership structure is rather an endogenous result of
decisions that reflect the influence of shareholders and of trading on the market of
stocks.
Using the event study methodology, this research examines the effect of significant
increases in institutional ownership - using pension funds as a proxy for such
ownership - on the share price performance of selected companies on the JSE
Securities Exchange (JSE).
The outcome of this research suggests that a significant increase in institutional
ownership on the JSE is associated with poor share price performance, which does
not support existing literature
Description
MBA - WBS
Keywords
Johannesburg Securities Exchange, Share ownership, Share price performance