The effect of shareholder concentration and type on firm performance and leverage

This study examines the influence of shareholder concentration and shareholder type on firm performance and leverage for both listed and non-listed companies based in Belgium, Germany and the Netherlands for the period 2009-2017. I provide evidence that the presence of a blockholder leads to better firm performance, especially when the controlling shareholder is a family. In contrast, a foundation or public authority leads to worse performance. No supporting evidence is found for a positive impact of private equity funds on firm performance. Besides, I find a positive impact for the presence of a blockholder on the leverage ratio. This is especially the case when the controlling shareholder is an institutional investor, family or private equity fund. I did not find a significant relation between a bank as controlling shareholder and the leverage ratio of a company.