Pinto, AntónioAugusto, MárioGama, Paulo2014-11-202014-11-202013-06http://hdl.handle.net/10400.19/2369This paper analyzes the causal relationship between the ownership concentration, insider ownership and profitability using a sample of 4163 Portuguese SMEs and panel data methodology. The results show an endogenous and dynamic relationship between the variables. The quadratic specification established between ownership concentration and profitability suggests that for low levels of control rights the expropriation hypothesis prevails and for high levels the supervision hypothesis prevails. It was also possible to validate the effect of entrenchment and convergence of interests in the relationship established between the insider ownership and profitability. The relationships established suggest a reciprocal causality between the variables, as well as an interdependence expressed by the relevance of the estimators obtained in the simultaneous equations model. Thus, each of the attributes – ownership concentration, insider ownership and profitability – is a function of the others.porCorporate governanceinsider ownershipownership concentrationprofitabilityconference object