Concentration du capital et performance financière des entreprises cotées sur les marchés de la Communauté d'Afrique de l'Est : une étude exploratoire

The objective of this paper is to investigate the relation between ownership concentration and performance of listed companies in the East African Community (EAC). The EAC is a community of six countries located in the East Africa : Rwanda, Kenya, Uganda, Tanzania, Burundi and South Sudan. Among this Community, all of the countries excepted Burundi and South Sudan own a financial market. These countries decided in 2010 to create the East African Stock Exchanges Association (EASEA). The EASEA has many purposes : the increase of attractiveness and liquidity of its financial markets to encourage foreign investments and the economic development of the region. The study of the relation between ownership concentration and performance is particularly necessary to identify the main levers to be activated to enable the EASEA to achieve its objectives. On the one hand, ownership concentration is represented by the level of capital concentration by the principal shareholder and the type of controlling shareholder. On the other hand, performance is represented by the rate of return on equity (ROE) and the rate of return on assets (ROA). An econometric analysis using panel data was carried out on a sample of 290 observations. Even if the main problem of the study is the unavailability of some data, our results show the existence of a significant positive relation between the concentration of capital by the first shareholder and the economic performance of firms. A significant negative influence was found between the number of shareholders and the financial performance of the firms studied. Concerning the type of controlling shareholder, the research highlights a significant positive relation between the presence of a foreign principal shareholder (i.e. a shareholder outside the East African Community) and the economic performance, whereas the presence of a controlling institutional shareholder is negatively correlated with the financial performance.The objective of this paper is to investigate the relation between ownership concentration and performance of listed companies in the East African Community (EAC). The EAC is a community of six countries located in the East Africa : Rwanda, Kenya, Uganda, Tanzania, Burundi and South Sudan. Among this Community, all of the countries excepted Burundi and South Sudan own a financial market. These countries decided in 2010 to create the East African Stock Exchanges Association (EASEA). The EASEA has many purposes : the increase of attractiveness and liquidity of its financial markets to encourage foreign investments and the economic development of the region. The study of the relation between ownership concentration and performance is particularly necessary to identify the main levers to be activated to enable the EASEA to achieve its objectives. On the one hand, ownership concentration is represented by the level of capital concentration by the principal shareholder and the type of controlling shareholder. On the other hand, performance is represented by the rate of return on equity (ROE) and the rate of return on assets (ROA). An econometric analysis using panel data was carried out on a sample of 290 observations. Even if the main problem of the study is the unavailability of some data, our results show the existence of a significant positive relation between the concentration of capital by the first shareholder and the economic performance of firms. A significant negative influence was found between the number of shareholders and the financial performance of the firms studied. Concerning the type of controlling shareholder, the research highlights a significant positive relation between the presence of a foreign principal shareholder (i.e. a shareholder outside the East African Community) and the economic performance, whereas the presence of a controlling institutional shareholder is negatively correlated with the financial performance