Determinants of Ownership Structure: A Panel Data Approach to the Spanish Case
Posted: 25 Jun 1998
Date Written: February 1996
Abstract
In this paper we investigate the determinants of the ownership by examining a sample of publicly traded firms in Spain. We introduce a panel data approach to account for time and cross section variables. These determinants are drawn from Demsetz and Lehn (1985), and Prowse (1992) papers. Our results are consistent with previous research. We find negative relation between size and ownership concentration, even if we account for different type of owners as individuals, Spanish firms, foreign investors and financial stockholders. We also find negative relation with firm specific noise environment. There is no significant link between regulated firms and ownership concentration. Our time approach includes the variation of stock market index as a proxy for the cyclical business conditions. We compute a fixed effect model accounting for size, noise environment and stock index evolution. There is a positive relationship between size and ownership concentration for all type of shareholders. This evidence suggests that as firm size grows, those shareholders who have significant participation increase their positions. The variance of firm returns only affects ownership of foreign investors. These investors also perform in the way the stock index runs: increasing their participation in a growing period and decreasing when the stock prices drop.
JEL Classification: G32
Suggested Citation: Suggested Citation