Ownership Concentration and Economic and Financial Performance in Latin-American Companies

Abstract

The study examined the relationship of ownership concentration in the economic and financial performance of publicly traded Latin American companies possessing American Depository Receipts (ADRs). Generally, the capital structure decisions are tied directly to the results of the organizations, thus reflecting the economic and financial performance. The correlation between the set of variables within the group of ownership structure with the group of economic and financial performance showed significant correlation with the linear combinations, when analyzed in the set of all the samples of companies and taken separately by country. However, the results did not show similar correlation to Venezuela, Colombia and Peru due to the existence of few observations. The results also portrayed a significant correlation within economic and financial performance, higher to Mexican companies, when compared with the results of other countries and among the set of the two groups of variables that highlighted the analysis by ownership structure and economic and financial performance as well.

Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

“… Koch and Smolka (2019) provided novel confirmation that firms with foreign aid viably raised the aptitudes of their labor force by enlisting high-skilled workers and giving them expert readiness. da Silva et al (2018) asserted that foreign ownership was positively related to more innovation performance because foreign investors can bring necessary resources, especially financial resources, and advanced technologies for innovation activities. The following hypothesis is proposed:…”