Ownership Structure and Financial Performance in Emerging Markets: Evidence from Family-Controlled Textile Firms

Abstract

The relationship between ownership structure and financial performance remains a central issue in corporate finance, particularly in family-controlled firms where ownership and management are closely intertwined. Using panel data from textile companies listed on the Dhaka Stock Exchange over the period 2013–2023, this study examines the impact of family ownership on financial performance by applying a Fixed Effects Model (FEM) with year fixed effects to control for time-specific effects. In addition, quantile regression analysis is employed to capture the effect of family ownership across different levels of financial performance. Earnings per share (EPS) is used as a proxy for financial performance, while liquidity, inventory turnover, debt-to-equity ratio, and growth are included as control variables. The empirical findings reveal that family ownership has a positive and statistically significant effect on financial performance, indicating that higher family involvement contributes to stronger monitoring, reduced agency conflicts, and improved profitability. The quantile regression results further show that the positive effect of family ownership becomes stronger among high-performing firms. These findings provide important insights into the role of ownership structure in shaping firm performance and corporate governance outcomes.