Ownership Structure, Information Asymmetry and Growth of the Firm: Implications from Non-Financial Firms Listed in S&P500

Mina K. Bishara, Panagiotis Andrikopoulos, Tarek Eldomiaty

    Research output: Contribution to journalArticlepeer-review

    4 Citations (Scopus)
    71 Downloads (Pure)


    This paper investigates the association between growth of the firm and ownership structure under conditions of information asymmetry. The objective is to show the effects of information asymmetry (favorable vs. adverse selection) on the choice of the ownership structure that helps firms grow. Our sample includes nonfinancial firms listed in the S&P500 over the period 2000 to 2016. The dependent variable is growth of the firm measured by growth in sales. The independent variables are proxies for changes in ownership structure, individual investors, investment managers, and brokerage firms. Observations are grouped according to level of information asymmetry (high or low) using three proxies for information asymmetry: beta of return on equity (ROE), probability of default of ROE, and q ratio. The results conclude that (a) changes in ownership structure affect growth of the firm positively and (b) the effect of ownership structure is more significant and consistent at low level of information asymmetry. The contribution of the paper is threefold. First, it extends the arguments of corporate governance by showing the impact of ownership structure on growth of the firm. Second, the paper offers robust evidence that growth of the firm is associated with low level of information asymmetry. Third, the paper shows that fundamental financial information can help lessen the level of information asymmetry and thus help firms grow.

    Original languageEnglish
    Pages (from-to)1580-1589
    Number of pages10
    JournalManagerial and Decision Economics
    Issue number8
    Early online date19 Jul 2020
    Publication statusPublished - Dec 2020

    Bibliographical note

    This is the peer reviewed version of the following article: Bishara, M.K., Andrikopoulos, P. and Eldomiaty, T., 2020. Ownership structure, information asymmetry and growth of the firm: Implications from nonfinancial firms listed in S&P500. Managerial and Decision Economics, 41(8), pp.1580-1589, which has been published in final form at http://dx.doi.org/10.1002/mde.3204. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited. This document is the author’s post-print version, incorporating any revisions agreed during the peer-review process. Some differences between the published version and this version may remain and you are advised to consult the published version if you wish to cite from it.


    • Ownership structure
    • information asymmetry
    • growth of the firm
    • S&P500

    ASJC Scopus subject areas

    • Finance


    Dive into the research topics of 'Ownership Structure, Information Asymmetry and Growth of the Firm: Implications from Non-Financial Firms Listed in S&P500'. Together they form a unique fingerprint.

    Cite this