This paper addresses one of the important controversies in finance: how the ownership proportion of controlling shareholders affects the market value of a firm. What distinguishes this study from previous research on this topic is its methodological approach employing a switching regression model. This paper first theoretically derives the switching regression equation and then applies the results to the relationship between controlling shareholder ownership proportion and firm market value. Specifically, the hypotheses tested were the convergence-of-interest hypothesis and the entrenchment hypothesis, examining whether the relationship between the two variables differs across intervals of controlling shareholder ownership proportion, whether there are yearly differences in the relationship between the two variables, and whether differences exist between chaebol-affiliated firms and non-affiliated firms. The test results yielded some evidence inconsistent with prior research findings, although statistical significance was not established.