Impact of Ownership Structure on Shareholder Value Creation: Longitudinal Evidence from India

Abstract

This study aims to analyze the effect of ownership structure on value creation for shareholders in listed companies in India during the period 2005 to 2025 employing a longitudinal panel data approach. The study sets out to examine the impact of four ownership dimensions namely: promoter ownership, institutional ownership, foreign ownership, and ownership concentration, on creation of shareholder wealth in the Indian corporate sector. Tobin's Q is used as the main measure of shareholder value creation and firm-specific control variables including firm size, leverage, liquidity and board size are included. The study is secondary in nature and secondary data is gathered from reliable financial database like CMIE ProwessIQ, Capitaline, NSE, BSE and annual reports of the selected firms. Descriptive statistics, correlation analysis, unit root tests, Hausman specification tests and Panel regression models (Fixed Effects and Random Effects) are used to attain the objectives of the study. The results show that promoter ownership, institutional ownership, foreign ownership and concentration of ownership are positively and significantly affecting the creation of shareholder value. The findings indicate that good ownership structures have a positive effect on the quality of corporate governance, mitigate agency problem, and increase firm value. The study also reveals that firm size and liquidity have positive impact on shareholder value while leverage has negative impact on firm performance. The diagnostic and robustness tests confirm the reliability and validity of the estimated models. The study contributes to the literature by offering the up-to-date empirical evidence on ownership structure and shareholder value creation in the Indian context with the use of long-term panel data. The findings are important in policy, regulation, investment and corporate management for shaping governance mechanism to achieve shareholder wealth maximization and sustainable corporate growth.

Received: 2026-05-06 | Revised: 2026-08-21 | Accepted: 2026-09-25 | Online Available: 2026-10-16

Declarations

Ethics and Guidelines: The study was conducted in accordance with the Declaration of Helsinki. The ethical approval specifically covers the research procedures and data collection activities conducted for this study.

Consent to participate: Written informed consent was obtained from all participants prior to data collection. Consent was obtained using a standardized written form, signed by each participant before participation in the survey.

Consent to publish: The authors have provided consent to publish.

Competing interests: The authors declare no competing interests.

Data availability statement: Data will be made available on reasonable request from the corresponding author.

Funding: This research received no external funding.

Clinical Trial Number: Not Applicable.

Declaration of using generative AI: During the preparation of this work the author(s) used ChatGPT in order to correct the grammatical errors. After using this tool/service, the author(s) reviewed and edited the content as needed and take full responsibility for the content of the published article.

Author Contributions: M.S.T.: Conceptualization, methodology, writing—original draft preparation, writing—review and editing. All authors have read and agreed to the published version of the manuscript.