Ownership structure, asset intensity and firm performance

Research Question/Issue: This article studies the interrelation between ownership structure, asset intensity and corporate performance and risk in the hospitality industry. This industry is characterised by a strong presence of blockholders and a tendency to divest its real estate making it an ideal setting to analyse the impact on firm performance and risks. Research Findings/Insights: Merging ownership data with accounting and market data from a sample of 15 countries between 2004 and 2013, we find that ownership structures affect the asset intensity and the disposal of assets by corporations. We further observe that both these variables have a significant influence on different measures of corporate risk and accounting and market performance. Theoretical/Academic Implications: This study provides empirical support for the classic agency theory that ownership structures impact corporate performance through investments and the use of assets. It thus proposes an integrated framework which explains a way through which ownership has an effect on firm performance and risk. Practitioner/Policy Implications: This study offers insights to managers on the effect an asset light strategy has on corporate performance. It further describes the preference shareholders tend to have on this corporate policy. In addition, it provides investors with a framework to understand the stakes of owning one’s properties or to dispose them to concentrate on the core business