Impact of investors‘ protection and corruption on shareholders and company performance

Substantial shareholders play a very important role in company performance. This study examines the relationship between the number of substantial shareholders and company performance. Being the dependent variable of this study is the company performance (measuring in profitability, liquidity and gearing) and the independent variable will be the substantial shareholders. Since it is a wide cross-region analysis, institutional characteristics such as investors‘ protection and corruption perception index (CPI) are taken as moderating variables. As this study has a cross-sectional data, ordinary least square (OLS) regression method using multivariate regression is undertaken to run for all variables tested. The results of this study presents that in general, substantial shareholders has a negative impact on company performance. Moreover, it is also found in this study that Investors‘ Protection and Corruption Perception Index (CPI) have a significant moderation effect on the relationship between substantial shareholders and company performance