The Connection Among Firms' Ownership Structure, Size, Age, and Performance: Insights from a developing Economy

Abstract

This study examines the impact of ownership structure on the performance of firms listed on the Pakistan Stock Exchange (PSX) using annual data from 100 companies spanning 2016 to 2023. Ownership is categorized into individual ownership (IND), institutional ownership (INS), and directors' ownership. Firm performance is assessed using Return on Assets (ROA) and Return on Equity (ROE), while firm size and firm age are included as control variables due to their influence on equity structures and returns. The findings indicate that institutional ownership and directors' shareholdings positively impact firm performance, whereas individual shareholdings exhibit a negative association. These results suggest that concentrated ownership structures, particularly those involving institutional investors and directors, enhance firm profitability and shareholder value.