Ownership Structure and Performance of Firms Listed on Ghana Stock Exchange

Abstract

The study examined the relationship between ownership structure and performance of firms listed on the on the Ghana Stock Exchange. The study collected annual series of data spanning from 2007 to 2016. The study made use of quantitative approach and employed a sample of 25 firms listed on the Ghana Stock Exchange to examine the effect of ownership structure on firm performance. The study also obtained data on ownership structure from audited annual reports while data on performance was obtained from Ghana Stock Exchange factbook, GSE profile of listed firms and audited annual report. The study employed the generalized least squares panel regression analysis technique to analyse the data. The study also measured performance on the aspect of accounting base measure (Return on Asset) and market base measure (Tobin‟s Q). The findings revealed that institutional ownership, government ownership have a significant negative relationship with both return on asset and Tobin‟s Q which are measures of firm performance. The study also found a negative significant relationship between managerial ownership and firm performance. However, block shareholding have a negative relationship with firm performance. The study suggest that there is the need to encourage block shareholding since is a good governance mechanism to reduce agency cost and increase firm performance.