Analysis of Aspects of Corporate Ownership in BRICS Countries

The basis of growth of any economy in the world are companies. The development of the companies themselves, in many ways, depends on corporate governance and the system of corporate ownership, in particular. Key aspects of the corporate ownership system is the distribution of ownership, i.e. the presence of small and large investors and their interaction, as well as the presence of institutional investors. Many researchers argue about the positive role of large investors and the insignificance of institutional investors for the company's results while others contest such results. In addition, there is no single approach to the role of the state as the owner of the company. This study aims to determine the impact of such aspects as the presence of a large and institutional investor, as well as their share on the financial performance of the company. The study was conducted on the basis of a sample of state-owned enterprises and private companies in the BRICS countries in the period from 2010 to 2017. During the study, it was determined that for both types of companies, the impact of the presence of a strong investor (25-49% of capital) on the return on assets and on equity is positive – from 18.8% to 263% growth of ROE and ROA. The influence of the controlling investor (more than 50%) was noticeable only in the case of ROA for state-owned enterprises, while the moderate investor (5-24%) reduced the return on assets for such companies by almost a quarter. The impact of institutional investor turned out to be insignificant – the 1 p.p. increase of the share of the investor results in only 0.7% growth of the return on equity for state-owned enterprises, and 0.23% growth of the return on assets for private companies. In addition, the state as the owner does not imply a definite negative effect on the effectiveness of the company.