Ownership dynamics : how ownership changes hands over time and the determinants of these changes

Abstract

This paper investigates the determinants of ownership structure and adjustments in ownership for Norwegian private firms. We find that firm characteristics such as size, riskiness, profitability, growth prospects, leverage and liquidity have a significant impact on concentration, but much of the variation in ownership structures is explained by an unobserved heterogeneity component. When investigating the drivers of adjustments we establish that previous ownership level together with the lagged changes in concentration, firm riskiness, profitability and share owned by families are significant predictors of a subsequent change in ownership concentration. To our knowledge, this paper is the first to take both a static and dynamic approach in the study of ownership concentration in private firms and it sets the ground for further research on ownership in private firms.