The impact of foreign shareholders on a company's performance: The analysis of Russian listed companies

Abstract

This research study examines the relationship between ownership structure and company’s performance, and, particularly, the impact of foreign shareholders on the corporate performance. A sample of 41 publicly listed companies belonging to different industrial sectors with the securities employed in the RTS Index and MICEX Index in 2008-2009 is used. The empirical results provide evidence that foreign shareholders have positive and significant impact on company’s performance. However, when two categories of foreign investors are formed: nominal and real foreign shareholders, the empirical analysis reports slightly different results. Foreign nominal investors, denoted as institutional investors with Russian individual owner behind, have a negative impact on company’s performance. And foreign real shareholders, represented by foreign institutional investors, are associated with stock market-based measures of company’s performance only.