The equity ownership structure of Thai firms

Abstract

This paper examines the ownership structure of Thai firms. The data sample contains 270 firms listed in the Stock Exchange of Thailand in 1996 The ownership structure is concentrated. In 82 96 percent of the firms in the sample, the largest shareholders are also controlling shareholders. Controlling shareholders are defined as those who hold more than 25 percent of a firm' s stakes. The controlling shareholders are mainly families. Foreign investors form the second largest group of controlling shareholders most of the controlling shareholders use a simple ownership pattern to control the firms. Only in 19.55 percent of the firms, the controlling shareholders employ pyramid structures, and cross-ownership structures to control the firms. The controlling shareholders do not just control the votes. In approximately 75 percent of the firms in the sample, the controlling shareholders are involved in the firms' management as officers and directors. Finally we investigate empirically factors that lead to the existing ownership structure. The regression results show that ownership concentration is positively related to measures of growth, size, and PIE ratios.