Effect of Ownership Structure on Firm Values - FINA8004

Running Head: EFFECT OF OWNERSHIP STRUCTURE ON FIRM VALUES IN
COMPANIES
Effect of Ownership Structure on Firm Values in Companies
Name of the Student
Name of the University
Author Note

1EFFECT OF OWNERSHIP STRUCTURE ON FIRM VALUES IN COMPANIES
Table of Contents
CHAPTER FOUR: DATA ANALYSIS.........................................................................................2
4.1 Introduction............................................................................................................................2
4.2 Conceptual Framework..........................................................................................................2
4.3 Problem Statement.................................................................................................................3
4.4 Hypothesis Development.......................................................................................................3
4.5 Research Methodology..........................................................................................................4
4.6 Data Analysis.........................................................................................................................5
4.6.1 Demographic Analysis........................................................................................................5
4.6.2 Analysis of Ownership Strategies...................................................................................8
4.6.3 Correlation Analysis.......................................................................................................8
4.6.3 Testing of relevant Inferences..........................................................................................10

2EFFECT OF OWNERSHIP STRUCTURE ON FIRM VALUES IN COMPANIES
CHAPTER FOUR: DATA ANALYSIS
4.1 Introduction
This research is mainly aimed towards the effects of ownership structures on firm values
of different types of firms. Ownership structure can be described as three different types of
factors – Ownership Concentration, Control Right Divergence and Owner Identity. The effects
and influence of these three factors of the firm value has to be assessed.
4.2 Conceptual Framework
The concepts of these three types of ownership structures will be described in this
section. The framework under which the study will be conducted is given here. The positive and
negative effects of the ownership structure on the firm performance have been discussed in
details in the analysis section. The main aim of the study is to test how the fir performance is
affected by the ownership structures.

3EFFECT OF OWNERSHIP STRUCTURE ON FIRM VALUES IN COMPANIES
4.3 Problem Statement
As per the aim of the research, the following research questions can be framed. Based on
these research questions, data has been collected. The analysis of the data will also be conducted
on the basis of the research objectives.
 What is the effect of Ownership Concentration on the performances of the Chinese
companies?
 What is the effect of Control Right Divergence on the performances of the Chinese
Companies?
 Is there any association between the identity of the owners and the firm values?
4.4 Hypothesis Development
Keeping the research questions and objectives in mind, the following hypothesis has been
framed. The null and alternate hypothesis for the first research question is given as follows:
Null Hypothesis (H01): Ownership Concentration does not have any significant effect on the
performances of the Chinese Companies
Alternate Hypothesis (HA1): Ownership Concentration has significant effect on the
performances of the Chinese Companies
For the research question stated second, the null and the alternate hypothesis that can be
developed is given as follows:
Null Hypothesis (H02): Control Right Divergence does not have any significant effect on the
performances of the Chinese Companies

4EFFECT OF OWNERSHIP STRUCTURE ON FIRM VALUES IN COMPANIES
Alternate Hypothesis (HA2): Control Right Divergence has significant effect on the performances
of the Chinese Companies
For the last research question of this study, the null and the alternate hypothesis that has
been developed from the research question is given as follows:
Null Hypothesis (H03): There is an association between the Identity of the owners and the Firm
Values
Alternate Hypothesis (HA3): There is no association between the Identity of the owners and the
Firm Values
4.5 Research Methodology
To test the first hypothesis, in which the effect of ownership concentration on the firm
value is to be tested, regression analysis has been conducted as regression is the best method to
test the effect of an independent variable on a dependent variable.
The second hypothesis also has been framed in order to test the effect of Control Right
Divergence on Firm Performance. In this case also, the effect of an independent variable
(Control Right Divergence) on the dependent variable (Firm Performance) has to be tested. Thus,
regression analysis will be conducted for this case too.
The third hypothesis has been framed to test the association between the variables
owner’s identity and firm value. To test the association between two variables for a sample a
correlation analysis can be conducted. To predict the results for a whole population, correlation
analysis is not that efficient. In order to do that, Chi-Square test of association has to be
computed.

5EFFECT OF OWNERSHIP STRUCTURE ON FIRM VALUES IN COMPANIES
4.6 Data Analysis
The data has been collected for the analysis of the effects of ownership structures on firm
values in Chinese companies. The data was collected on the basis with the help of a
questionnaire, which is attached in the APPENDIX section of the paper. The questionnaire was
made as a word document and uploaded in the internet as a Google form. For over a fortnight,
the responses of 60 valid respondents were recorded out of 70 responses received. Thus, the
success rate of the data collection is almost 86 percent.
4.6.1 Demographic Analysis
Demographic analysis of the 60 valid responses has been computed. Demographic
analysis includes the descriptive statistical analysis of the demographic profile of the valid 60
respondents.
It can be seen from table 4.1 that out of the 60 respondents 25 were found to be female
and 35 were male members. Thus, it can be clearly said that 41.7 percent of the responses were
from the female point of view and 5.8 percent of the responses were from the female point of
view. The percentages of male and female members are almost same. Thus, the analysis will give
a good understanding of the views of the Chinese people on the research topic.
Table 4.1: Gender Distribution
Frequency Percent
Valid
Female 25 41.7
Male 35 58.3
Total 60 100.0