Abstract:
This study investigates the impact of Ownership Structure and Ownership
Concentration on financial performance of Public Companies listed on
Colombo Stock Exchange. For this purpose, a sample of 46 top capitalized
companies as on 30th August 2016 were selected. Accounting based
performance measures of Return on Assets and Return on Equity are used as
proxies for financial performance. Ordinary Least Square (OLS) linear
Regression model is employed to identify the association between dependent
and independent variables. The results of the study reveals that Institutional
Ownership, Individual Ownership and Foreign Ownership have not significant
impact on financial performance. However, the Ownership Concentration
ratios have significant impact on financial performance. All the Ownership
Concentration ratios used in this study showed significant impact on the
Return on Assets and Return on Equity except the percentage of shares held
by first two largest shareholders. This study implies that the majority of the
share ownership is held by first five largest shareholders. Therefore, the most
of the Sri Lankan companies’ ownership are highly concentrated and it
influences to the financial performance.
