Book excerpt: The effect of ownership concentration on a firm's performance is an important issue in the literature of finance theory. This study seeks to examine the effect of ownership concentration on firm financial performance in Saudi Arabia, using pooled cross-sectional observations from the listed Saudi firms for three years between 2006 and 2008. I find that firm financial performance measured by the accounting rate of return on assets and rate of return on equity generally improves as ownership concentration increases. I also find that there exists a hump-shaped relationship between ownership concentration and firm performance, in which firm performance peaks at intermediate levels of ownership concentration. The study provides some empirical support for the hypothesis that as ownership concentration increases; the positive monitoring effect of concentrated ownership first dominates but later is outweighed by the negative effects, such as the expropriation of minority shareholders. The empirical findings shed light on the role ownership concentration plays in corporate performance, and thus offer insights to policy makers interested in improving corporate governance systems in an emerging economy such as Saudi Arabia.