Owning The Wave: Equity Ownership Structures and OMX-Stock Returns During the Covid-19 Crisis

Abstract: This paper examines if Swedish equity ownership structures provided corporate immunity to the Covid-19 crisis. Our paper shows that it is the joint effect of ownership concentration and equity identity that is an important determinant of firm value during an economic crisis. We find a positive relationship between firm value and ownership concentration during the pandemic. Our paper provides further evidence that there is a negative marginal benefit of additional blockholder concentration in a firm, indicating that it is most valuable to have one large owner as opposed to several, dispersed owners. We provide a novel finding to the literature by showing that blockholder venture capital and private equity ownership concentration is positively related to firm value in a crisis. The paper finds additional support that firms with high concentration of insider and corporate ownership perform relatively better than hedge fund and institutional owned firms.