Top Executives’ Shareholding Pattern and Firm Performance: A Study on Selected Pharmaceutical Companies in Bangladesh

Abstract

The paper investigates whether there is any relationship between top executives shareholding pattern and firm performance in the three pharmaceutical companies listed in DSE and they are Square Pharmaceuticals Limited (SPL), Beximco Pharmaceuticals Limited (BPL) and Renata Limited (RL) for a period of five years (2008-2012). For determining the relationship, the study has used statistical techniques like simple linear regression equation, correlation coefficient and coefficient of determination. To test the formulated hypothesis, t test at 5% level of significance has been applied. The main finding of this research is that there is significant relationship between ownership structure and performance for RL but insignificant for SPL and BPL Moreover, there are evidences that the top executives’ shareholding pattern have significant influence on firm performance. The contribution of this research is that it would provide the most updated evidence on the relation between top executives shareholding pattern and firm performance in the three pharmaceuticals company listed in DSE that would be beneficial to the current and prospective investors in making the right call to invest and getting maximum return.