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Effect of ownership structure and board structure on firm value: evidence from India

Rakesh Mishra (Indian Institute of Foreign Trade, New Delhi, India)
Sheeba Kapil (Indian Institute of Foreign Trade, New Delhi, India)

Corporate Governance

ISSN: 1472-0701

Article publication date: 7 August 2017



This paper aims to explore the relationship of promoter ownership and board structure with firm performance for Indian companies.


Corporate governance structures of 391 Indian companies out of CRISIL NSE Index (CNX) 500 companies listed on national stock exchange (NSE) have been studied for their impact on performance of companies. Panel data regression methodology has been used on data for five financial years from 2010 to 2014 for the selected companies. Performance measures considered are market-based measure (Tobin’s Q) and accounting-based measure (return on assets [ROA]).


The empirical findings indicate that market-based measure (Tobin’s Q) is more impacted by corporate governance than accounting-based measure. There is significant positive association between promoter ownership and firm performance. It is also indicated that the relationship between promoter ownership and firm performance is different at different levels of promoter ownership. Board size is found to be positively related to ROA; however, board independence is not found to be related to any of the performance measures.

Research limitations/implications

Limitations of the study are in terms of data methodology and possible omission of some variables. It is felt that endogeneity and reverse causality might be better addressed using simultaneous equation methodology.


The paper adds to the emerging body of literature on corporate governance performance relationship in Indian context using a reasonably wider and newer data set.



Mishra, R. and Kapil, S. (2017), "Effect of ownership structure and board structure on firm value: evidence from India", Corporate Governance, Vol. 17 No. 4, pp. 700-726.



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