Empirical Research on Ownership Structure and Corporate Performance Based on the Perspective of Dynamic Endogeneity

AbstractMost previous literatures deem ownership structure as exogenous variables to deal with and believe there only exists a static relationship between ownership structure and corporate performance. In this paper, we choose China's 509 listed companies of Shanghai and Shenzhen during 1999-2008. With dynamic panel model, after controlling effect of past performance, simultaneity, as well as unobservable heterogeneity, we come to the following conclusions: (1) There is a two-way interaction effect between the proportion of largest shareholding and corporate performance; (2)Whether in a static or dynamic model, the proportion of management ownership is uncorrelated with performance; (3)Some weak evidence shows there exists intertemporal effect between ownership structure and corporate performance. However, the relationship is not stable, which depends on the definition of performance and the choice of estimation methods