Ownership Structure and Corporate Financial Performance in Emerging Market: Panel Data Analysis from Listed Firms in Kenya

  • Thomas K. Tarus School of Graduate Studies, University of Kigali-Rwanda
  • John K. Tarus School of Business and Economics, Moi University-Kenya
Keywords: Ownership Structure, Institutional Ownership, Insider Ownership, Corporate Financial Performance and Agency Theory


The purpose of this study was to draw a relationship between ownership structure and corporate financial performance by employing agency as a logical theoretical perspective. Panel data collected was analysed using fixed effect model from 46 selected listed firms from 2015-2020 with a total of 276 firm-year observations. The study findings showed that institutional ownership had negative and significant relationship on corporate financial performance. Additional results revealed that insider ownership had a positive and statistically significant relationship on corporate financial performance which is consistent with the prediction of agency theory that concentration of insider ownership aligns the interest of shareholders with those of the managers and hence improves performance. There is therefore need for firms to have significant percentages of insider ownership in order to benefit from reduced conflict between managers and shareholders and condusive environment for business. Findings of this study may provide useful insights to corporate managers and investors about the relationship between ownership structure and financial performance of firms from an emerging market.


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How to Cite
Tarus, T., & Tarus, J. (2022, June 28). Ownership Structure and Corporate Financial Performance in Emerging Market: Panel Data Analysis from Listed Firms in Kenya. African Journal of Education,Science and Technology, 7(1), Pg 294-301. Retrieved from http://ajest.info/index.php/ajest/article/view/772