Ownership concentration and performance of industrial companies listed on the Casablanca Stock Exchange

Abstract

Ownership structure (also known as shareholding structure) is one of the governance mechanisms influencing the financial performance of firms. The link between ownership structure and performance has been the source of several research studies, both theoretical and empirical, which have found mixed results. The objective of our manuscript is to study whether ownership concentration (as a pillar of ownership structure) impacts the financial performance of Moroccan companies listed on the Casablanca Stock Exchange, in the industrial sector for the period 2017 - 2019. The selected sample consists of 24 companies belonging to the industrial sector (72 observations), the data are collected from secondary sources (balance sheet, CPC, statements of management balances and cash flow statement) of the companies, published by the Casablanca Stock Exchange, the Moroccan Capital Market Authority AMMC and the CDG capital. The research problem and hypotheses are addressed by using regression and correlation analysis (Pearson and partial) of panel data. The results show that ownership concentration is correlated with the performance of listed industrial companies. Concentration depends not only on past values but also on economic profitability. Thus, with respect to financial performance measured by Tobin's Q, the predictions of agency theory are verified for listed industrial companies. Similarly, the results found confirmed the non-mono tonicity of the relationship between ownership structure and financial performance.

JEL Classification : M40, M41, M48

Paper type: Empirical research