Аuthors:

Andrey B. Ankudinov, Cand. Sc. (Physics and Mathematics), Associate Professor of Corporate Financial Management Dept. Kazan Federal University

Bela S. Bataeva, Dr. Sc. (Econ.), Professor of Corporate Finance and Corporate Governance Dept. Financial University under the Government of the Russian Federation

Abstract:

Market capitalization is one of the main criteria for evaluating managerial efficiency in publicly traded companies. The ownership structure can act as one of the value drivers. Russian companies are characterized by concentrated ownership, which results in various agency conflicts, such as principal-agent and principal-principal problems. The paper aims to assess the impact that public corporations’ capital structure (including the composition of controlling shareholders, i.e. principals) has on their market capitalization. The research method is based on statistical analysis of the relationship between market multipliers of the largest publicly traded non-financial companies and the degree of ownership concentration and structure (state participation in equity capital and foreign ownership). The sample comprises 87 public companies traded on the Moscow Exchange; the research timeframe is from 2017 to 2019. Our findings prove that there is a statistically significant negative relationship between ownership concentration of Russian companies, state participation in their equity capital and market multiplier, and that there is a positive relationship between foreign investment and market capitalization. The investigation performed can be of interest for academic researchers involved in corporate governance in emerging markets as well as financial analysts and practitioners in the field of corporate capital structure management and the development of corporate fundraising strategies.

Keywords:

corporate governance; ownership structure; state ownership; agency conflict; foreign ownership; market capitalization; empirical analysis; panel data.

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