Individual and Institutional Ownership, Firm Age and Productivity

Total factor productivity represents a dimension of output that cannot be attributed to factors production; it is unique the firm, and central its competitiveness. We posit ownership structure plays key role in productivity. However, has an effect on which changes with firm’s age. Ownership optimal for new firms may not older firms. here consider impact as defined by shares individuals’ versus (broadly defined) institutional ownership. Our empirical counterpart draws UK company data 2008-2017, obtained from Orbis database. explanatory variables are joint share individual owners equity square, but we also control concentration indices, along range other firm-level characteristics. Applying fixed effects models instrumenting regional level variables, found companies majority minority outperform others. As age, however, these differences begin disappear, losing their control-related advantage. The results relative advantage early stage consistent property rights theory, emphasises residual should remain those whose investment critical. It can argued, whom critical firm ages. managerial implications emphasise competence optimising structure, evolve stages life-cycle firm.