Influence of Ownership Structure on Financial Performnance in Return on Equity

This study examined the influence of ownership structure on the financial performance, measured by Return on Equity (ROE), of listed non-financial firms from 2015 to 2024. Using an ex-post facto research design and panel data extracted from published annual reports, the study analyzed how managerial ownership, institutional ownership, foreign ownership, and ownership concentration affect ROE. The regression results revealed that managerial ownership (β = 0.157, p = 0.001), institutional ownership (β = 0.221, p = 0.001), and foreign ownership (β = 0.184, p = 0.002) significantly enhanced ROE, while ownership concentration had a negative effect (β = -0.093, p = 0.024). Firm size positively influenced ROE (β = 0.043, p = 0.041), whereas leverage had a significant negative impact (β = -0.148, p = 0.000). Based on these findings, the study concludes that diversified and actively monitored ownership structures particularly through managerial, institutional, and foreign equity participation are key drivers of profitability and shareholder value, whereas excessive ownership concentration can undermine financial performance. The study recommends that firms encourage moderate managerial and institutional shareholding, attract foreign investors, adopt governance mechanisms to limit over-concentration, and strengthen board independence to optimize ownership-related performance outcomes.