The Impact of Promoter Shareholding on Firm Value and Financial Performance: Empirical Evidence from Listed Firms in India

Corporate governance plays a vital rolein the determination of value and performance of listed firms across the world. In India, majority of listed companies are owned and managed by promoters and their ownership holding makes an impact on the corporate value and performance. The focus of this study is to examine the impact of promoter shareholding on the firm value and performance by using a sample of NIFTY 500 Index non-finance companies during the financial year 2012 to 2016. We applied panel data regression method for empirical analysis to capture the dynamics and impact of both time series and cross-sectional dimension of data.The study results reveal a significant positive relationship between promoter shareholding and firm value of sampled firms. This study observed that the financial performance of sampled firms is negatively affected by AGE, GROW and LEV of the sampled firms. Further, the empirical results reveal no relationship between promoter shareholding and financial performance of sampled firms.