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Communication Dans Un Congrès Année : 2005

Ownership structure and firm performance in transition countries:
The case of European Union new members

Que Giang Tran Thi
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Résumé

Our study focuses on the EU new members, which are transition countries. After a long
period of privatization and restructuring, the ownership structure of firms in these countries
takes a clearer form. This evolution of ownership structure has a considerable effect on firm
performance.
In using data from listed companies in the stock market of these countries, we study the
relationshipunder two aspects: the structure and the nature of shareholders. Unlike studies
undertaken about firms in developed countries, our sample includes firms with a foreign
ownership majority. Ourresults, in contradiction with alignment of interest theory, rather
corroborate the entrenchment theory. We find a negative relationship between the
concentrated ownership and firm performance. Nevertheless, a concentrated ownership in the
hands of foreign investors increases performance of firms. We also find that the manager-
owners have a positive influence on the firm performance. Given that the financial markets in
these countries are not very liquid and that the ownership structure is sufficiently stable after
significant changes in the middle of the 1990s, the endogeneity problem described by Demsetz (1985, 2001) does not arise in our studies.
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Dates et versions

halshs-00163828 , version 1 (18-07-2007)

Identifiants

  • HAL Id : halshs-00163828 , version 1

Citer

Que Giang Tran Thi. Ownership structure and firm performance in transition countries:
The case of European Union new members. AFFI International Meeting, 27 – 28 June 2005, 2005, Paris, La Défense, France. ⟨halshs-00163828⟩
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