Abstract:
Ownership concentration is an intriguing topic that has been attracted by financial
researchers and practitioners. However, previous studies have not reached a
consensus about concentrated ownership which is evident in listed companies in most
emerging countries. Therefore, the objectives of this study are to assess the level of
ownership concentration and to investigate whether the ownership concentration has
an impact on firm value, in listed companies in Sri Lanka. For this purpose, data
gathered from 205 listed companies in the Colombo Stock Exchange (CSE) from 2017
to 2019. Two ownership concentration variables namely the largest shareholder's
stake and the sum of holdings of the five largest shareholders are employed in this
study. Firm size and leverage are considered to control variables. Random effect
regression analysis were applied to analyze the data. The findings of this study suggest
that higher ownership concentration exists in listed companies in Sri Lanka. Further,
this study ratifies that concentrated ownership has a significant negative relationship
with the firm value.
