The Relationship between Ownership Concentration and Enterprise Performance- A case study for Tehran Stock Exchange

Numerous financial analysts believe that the enterprise structure and characteristics, and affiliation of shareholders affect enterprise performance. In this regard, corporate governance and segregation of ownership from the management are discussed. Evaluating the relationship between enterprise efficiency and ownership characteristics as one of the corporate governance mechanisms is essential, and enterprise value can enhance by designing and implementing appropriate corporate governance. This paper presents two crucial aspects; firstly, theoretical point of view, which describes the relationship between ownership concentration and enterprise performance in the Iran stock market. Secondly, the study's practical importance is that managers can uncover these relations and plan appropriate corporate governance to increase enterprise efficiency and performance. Furthermore, Iran's fragile economy and its emerging stock market have specific complexities, which adds to the importance of the present research. In this research, financial statements of all eligible companies on the Tehran stock exchange, including ۶۷ companies for five fiscal years between ۲۰۱۵ to ۲۰۱۹, were evaluated. To measure the performance of companies, the return on assets index, return on equity, and the Tobin’s Q Ratio were applied. The Pearson correlation and Durbin-Watson autocorrelation were used to estimate the correlations, and Fisher-Test and T-Student were used to evaluate the correlations' significance. The results depict a significant correlation between return on assets index and return on equity index to ownership concentration, but the correlation between Tobin’s Q Ratio and ownership concentration was rejected. Therefore, the first research hypothesis was confirmed, and there is a significant relationship between ownership concentration and enterprise Performance. Thus, ownership concentration can be considered a mechanism to control a company, and it can benefit the performance, including return on assets and return on equity. These significant positive correlations lead companies to focus on a limited number of shareholders with the main percentage of ownership instead of many shareholders with a small ownership percentage to increase the company's performance. This approach helps companies achieve their goals and satisfy the shareholders and those who want to use these financial statements.

کلیدواژه ها:

ownership concentration ، enterprise performance ، corporate governance ، Tehran Stock Exchange