Drawing on prior theoretical and empirical research examining corporate governance mechanisms, this study
empirically explores the effects of institutional and government ownership on the performance of firms listed on
the Kuwait Stock Exchange (KSE). Both a market-based measure (Tobin’s Q) and an accounting-based measure
(ROA) are used to measures firm performance. Based on a sample of 134 firms listed on the KSE in the year
2010, regression analysis results show a positive relationship between institutional investors and KSE firm
performance, suggesting the powerful and influential role institutional investors play as a corporate governance
mechanism. In contrast, a negative relationship is observed between government ownership and KSE firm
performance, implying worse market performance when government ownership exists. The findings imply that
different types of ownership structures have different affects on firm performance. Some ownership structures
enhance performance while others worsen performance.