Abstract:
With the growth of capital market, the shareholding structure of companies has become more complex. Direct ownership is easily recognizable through companies’ shareholders information, however with the formation of cross shareholding among companies, a kind of indirect and complex shareholding has emerged which is not observable. The primary owners (original owners) can take over other companies through intermediate owners. In this research a model is presented to identify and investigate the structure of indirect ownership. Identifying the hidden ownership relations together with determining the level of complexity of network and the degree of ownership concentration are among the capabilities of this model. To this end, the ownership network of Tehran Stock Exchange in June 2014 was analyzed. The results indicate that over 86 percent of all observed ownership relations have been formed by indirect ownership and at least with the presence of one intermediate owner. Moreover, 15.35 percent of the market’s total value (equals with 547 thousands billion Rials) was calculated twice and also studying the degree of concentration of ownership indicates that over 60 percent of the market’s total value belongs to only 10 percent of the shareholders.
Machine summary:
"By using the primary and intermediate owners’ ownership matrix, this model can precisely determine the amount which was considered twice in calculating the total market value and also can present an accurate rating of the major shareholders based on the total ownership (direct and indirect).
The ownership structure was studied by using the concepts of complex networks and it was determined that the main part of the existing ownership and value in world markets is monopolized by a small group of shareholders and also control concentration has resulted in formation of several "super-entities" (who control the main part of the world companies) in the world.
Table 5: The Total Weighted Average Distance Frequency رجوع شود به تصویر صفحه Source: Authors’ calculations 12,157 ownership relations including direct and indirect relations have been identified which according to prediction the highest number of observations is related with the second group of frequency table with the distance of more than 2.
Table 6: The Primary Owners of Mazandaran Cement Company (With the Shareholding of More than 1 Percent) رجوع شود به تصویر صفحه Source: Authors’ calculations Studying the degree of ownership concentration reveals that more than 60 percent of the market’s total value is owned by only 10 percent of the shareholders.
Additionally by determining the criterion of weighted average distance to specify the level of ownership network complexity for all the ownership relations in Tehran Stock Exchange and calculating the distribution of this distance, it was shown that most of the ownership relations between primary and intermediate owners have a length of more than 2 and contain a type of indirect ownership with the presence of at least one intermediate owner."