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Abstract: Relationship between ownership structure and firm performance has been a widely discussed issue among corporate finance scholars. In most parts of world firms have large or concentrated owners in their structure as concentrated ownership has proved an important tool to align the interest of management and ownership of firm and remove agency problem. Like many other parts of the world concentrated ownership is also a norm in the developing economy of Pakistan that almost half of the corporate ownership is held by large or concentrated owners. So determining the effect of these large owners on performance can be an important contribution for the efficiency of corporate sector and development of economy. Nature and direction of this relationship between large shareholders and firm performance has been checked by taking a sample of 100 listed non financial firms of Pakistan. Results of Ordinary least square regression analysis reveal that large share holders significantly and positively affect firm performance when performance is measured by ROA and ROE that efficient monitoring hypothesis works in Pakistani perspective. But direction of this relationship reverses when concentration by these large owners goes beyond 50 percent. It may be because of the hypothesis of private benefits of control by large owners. Key words: Large owners % Firm performance % Agency problem % Firm efficiency % Concentrated ownership
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