Ownership Concentration and Firm Performance: Evidence from Sweden

Abstract: This thesis investigates the relationship between firm performance and ownership concentration in Swedish firms. We find a negative nonlinear relationship, providing support for both a positive effect of ownership concentration, attributed to efficient monitoring, and a negative effect, attributed to expropriation of minority shareholders. Subsample analyses based on the estimated importance of these two factors support the indication that they are two key determinants for the relationship between ownership concentration and performance. Based on these findings, this paper argues that the benefits of monitoring are weak in Sweden relative to the costs associated with the risk of expropriation.