Insider ownership and performance of Russian public companies: Econometric estimates

Within the agency theory, insider ownership is viewed as a tool for reconciling the interests of owners and the company management. In the new economic reality, the agent problem is of particular relevance due to the challenges that require eliminating risks to ensure companies’ performance. The article assesses the impact of insider ownership concentration on the economic performance of joint stock companies. Methodologically, the study relies on the agency theory, property rights theory and the concept of corporate governance. The research analyzes data on the corporate ownership structure of 68 largest Russian public companies in 2011–2020 and identifies the share of insider ownership in these firms. The methods of econometric modelling were used to evaluate the dependence of EBITDA on insider ownership concentration in the companies of various forms of ownership. To carry out econometric analysis, we apply regression models in two specifications – cubic and piecewise linear regressions. The research results prove that insider ownership has a positive effect on the performance of private companies in the concentration interval of insider ownership between 0% and 35.39%; above this threshold, the positive impact diminishes. For companies with state participation, no statistically significant impact of insider ownership on performance was found. Further research is supposed to develop a more detailed modelling method by including a wider range of factors that characterize the corporate ownership structure and expanding the empirical basis of the study.