Ownership structure and its development: Case study on seven listed Finnish companies
Kestilä, Sven (2018)
2018
Tuotantotalous
Talouden ja rakentamisen tiedekunta - Faculty of Business and Built Environment
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Hyväksymispäivämäärä
2018-11-07
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tty-201810262491
https://urn.fi/URN:NBN:fi:tty-201810262491
Tiivistelmä
Efficient capital markets are essential for market-based economies and their growth. Economic growth is one of the most important factors that enable societies to improve their citizens well-being in multiple ways, for an example increased resources allocated to education and healthcare enabling enhanced outcomes in quality of education and healthcare. Equity ownership provides a way for individuals and groups for partaking in the economic growth of individual companies via dividends and increase in equity market value. This research aims to answer the following questions: What is the ownership structure of Finnish public companies like? How does this ownership structure evolve over time? Do investor groups have differing, systematic tendencies from one and another in terms of their buying and selling decisions related to the case companies?
To answer these questions, a multiple case, longitudinal (1995-2016) study was conducted for seven Finnish publicly listed companies differing in multiple variables including, but not limited to, operating industry, market capitalization, global reach and size of operations. The data used in the research was a combination of publicly available market data through NASDAQ, operator of Helsinki Stock Exchange and non-public trading and ownership data obtained from Euroclear for research purposes. All nominee shareholdings were excluded from the data analysis. Scientific sources for literature review were obtained through various finance and economic theory publications. This review of past literature enabled identification of trends in investors’ market behavior as well as assessment of ownership structure and corporate control in an international environment.
Results indicate that the Finnish case companies have varying ownership structures. Ownership structures have a tendency to remain rather stable over time. Household investors tend to exhibit strong contrarian trading patterns. Institutional investors tend to follow both momentum and contrarian trading strategy. Investor sophistication seems to be inversely correlated with the degree of contrarian-based trading. These findings are supported by past research.
To answer these questions, a multiple case, longitudinal (1995-2016) study was conducted for seven Finnish publicly listed companies differing in multiple variables including, but not limited to, operating industry, market capitalization, global reach and size of operations. The data used in the research was a combination of publicly available market data through NASDAQ, operator of Helsinki Stock Exchange and non-public trading and ownership data obtained from Euroclear for research purposes. All nominee shareholdings were excluded from the data analysis. Scientific sources for literature review were obtained through various finance and economic theory publications. This review of past literature enabled identification of trends in investors’ market behavior as well as assessment of ownership structure and corporate control in an international environment.
Results indicate that the Finnish case companies have varying ownership structures. Ownership structures have a tendency to remain rather stable over time. Household investors tend to exhibit strong contrarian trading patterns. Institutional investors tend to follow both momentum and contrarian trading strategy. Investor sophistication seems to be inversely correlated with the degree of contrarian-based trading. These findings are supported by past research.