This study is directed at researching the performance of the largest one hundred and fifty listed Australian firms under three separate control classifications, namely:
(a) Management controlled;
(b) Owner controlled; and
(c) Overseas controlled.
The performance of variables to be investigated are firstly, the annual return on shares; secondly, risk of return in terms of covariance risk, firm capital structures and finally, the dividend payout ratio. The analysis of each performance variable will be by means of a multiple regression analysis seeking to find significant differences in the partial regression coefficients associated with the control variables.
Academic interest in this topic can be traced back to the work of Adam Smith in the late eighteenth century, but in recent times, interest has mostly been generated by the work of Berle and Means, who in 1932, postulated that professional managers would act in their own interests to the detriment of that of the legal owners. There has been considerable empirical research into this issue in the United States of America and England, but to date conclusive results have not been obtained.
No conclusive results were obtained for firm performance in respect to return on shares as research in each year produced contradictory results which can only be resolved by further research. In regard to covariance risk, capital structure and dividend payout, this study revealed that there was no significant differences in the performance of each control group.