Financial centers, ownership concentration, and analyst following : when is ownership concentration value relevant ? evidence from an emerging market

Dissertant

Zarouali, Ilham

Thesis advisor

Faruq, Umar

University

Al Akhawayn University

Faculty

The School of Business Administration

University Country

Morocco

Degree

Master

Degree Date

2010

English Abstract

Does the location of a firm effect its information environment? Do stock market participants value ownership concentration differently for firms located at different geographic locations? Using data from India, this paper shows that firms located in Bombay, the main financial center of a country, have lower ownership concentration relative to firms located in other cities.

We argue that clustering of firms in the financial center improves their information environment and thus reduces incentives for concentrated ownership.

We show that our results are robust across different level of analyst following.

Our results also show that as the analyst following increase, the difference between ownership concentration of firms headquartered in Bombay and firms headquartered in other cities goes up.

We argue that higher analyst coverage, further, reduces incentives for concentrated ownership.

It, therefore, results in larger difference in ownership concentration of the two groups.

In addition, we also show that firm performance and valuation are positively related to ownership concentration.

However, this relationship is only prevalent for firms headquartered in cities other than the financial center, and with this relationship becoming stronger with increase in analyst following.

Main Subjects

Financial and Accounting Sciences

Topics

• India
• Corporate governance

No. of Pages

31

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-629532