The effect of ownership concentration on firm performance: an empirical analysis of Dutch firms.

This thesis examines the relationship between ownership structure and firm performance. Theory suggests that firms with larger shareholders should be able to monitor management more effectively, which would suggest a decrease in agency costs. However, others suggest that ownership concentration has no effect on the performance of firms, but that it is rather a result of a firm’s response on previous performance. Existing literature produces inconclusive results on the significance of the relationship between ownership concentration and firm performance. Therefore, the aim of this thesis is to contribute to this ongoing literature and see whether firms with a higher ownership concentration perform better than firms that are more widely dispersed. A sample of 560 firm-year observations is used, consisting of Dutch firms during the period 2011-2018. The return on assets is used as an indication of firm performance. The results show no statistical evidence of a relationship between ownership concentration and the return on assets.