Ownership structure and market competition in the Gulf cooperation council

PurposeThis study aims to examine the impact of sector market competition on the ownership structure of publicly listed firms in the Gulf Cooperation Council (GCC) countries.Design/methodology/approachThe authors employed the system-Generalized Method of Moments (GMM) model for panel data, utilizing over 93,000 data points from 6,215 firm-years across six GCC countries from 2010 to 2020.FindingsThe results reveal a statistically significant negative relationship between total block holders and institutional ownership for both Herfindahl-Hirschman and Tobin's-Q competition proxies. This finding suggests that companies operating in monopolistic or oligarchic sectors are likely to attract block holder investors. Moreover, various firm- and country-level factors, including return on assets, growth, size, gross domestic product and political crisis, also exhibit significant relationships with specific ownership variables.Practical implicationsInvestigating the influence of competition on block holders' ownership in the GCC region may provide new insights into the role of competitive markets in fostering economic development, promoting investor protection and shareholder rights, enhancing market efficiency and competitiveness and implementing effective reform policies and strategies.Originality/valueDespite the significant contribution of GCC countries to global oil commodities, limited market competition research has been conducted in these markets. This study aims to fill this gap by investigating the impact of various firm-, industry-, and country-level factors on firm ownership structure in the GCC region, focusing on the influence of market competition.