This paper analyzes ownership structure in Greece. Two measures of ownership concentration are used for the purpose of this study. The first is the sum of equity holdings of five biggest shareholders, while the second is the square of the first (Herfindahl index). Determination of the factors that affect ownership structure is done using Panel Data Regression models. Stratifying variables, like law (before and after the enactment of the corporate governance law), sector (financial or non-financial), and index ranking are used. Two main hypotheses are tested: (i) ownership structure is affected by the quality of corporate governance and its mechanisms, financial performance, board of directors' structure and composition and finally by the size of the firm; and (ii) the factors that affect ownership concentration in a country like Greece are the same with the ones that is specified in the literature for the Anglo-Saxon countries. Overall, ownership concentration in Greece has different characteristics than the ownership structure in the Anglo-Saxon countries, which creates a very different internal and external environment. Ownership structure is affected by the historical development of the firm, its organizational scheme and even more by the balance of power and control within the firm. Quality of corporate governance and mechanisms as well as external factors, like the law, index ranking, and existence of an external market for corporate control do not seem to have any significant effect on ownership structure.

Ownership structure has been a focal point for economists since the beginning of the industrial revolution. Berle and Means (1932) were the first to create a framework for the study of separation of ownership and control, which was later identified to create agency problem. Agency problem occurs when ownership is diffused. Principals (shareholders) want their capital and capital gains return to them. Agents (executive managers) control the firm and they have the real power over corporate assets. According to Gunther (2002) "a firm with a million shareholders does not have owners". It would not be cost-effective for the principals to monitor and control the executives.

When ownership concentration is high, the problem of corporate governance is different from the one described by Berle and Means (1932). Protection of minority shareholders from expropriation by the major shareholders is the main problem (La Porta et al., 1999; Bebchuk et al., 2000; Claessens et al., 2000; Maury and Pajuste, 2004; and Yeh and Woidtke, 2005). Shleifer and Vishny (1997) report a bizarre behavior of shareholders, who have assured ownership concentration beyond a threshold. These shareholders prefer to safeguard their dominant position, using entrenchment practices, than to gain some financial benefits. The main concern of potential shareholders is expropriation and capital reassurance (Leechor, 1999; and Maury and Pajuste, 2004).

Corporate Governance Journal, Industrial Revolution, Corporate Governance, Corporate Governance Systems, International Financial Reporting Standards, IFRS, Generally Accepted Accounting Principles, GAAP, Mergers and Acquisitions, MA, Corporate Governance Mechanisms, Greek Capital Market, Fixed Effect, FE, Binary Variable of Law, LAW, Binary Variable of Activity Sector, FIN.