Quotation Gugler, Klaus, Ivanova, Natalia, Zechner, Josef. 2014. Ownership and Control in Central and Eastern Europe. Journal of Corporate Finance 26, 145-163.




The unique natural experiment of the fall of the iron curtain led to large institutional and governance differences across countries. This allows us to observe the evolution of ownership and control after an initial shock.We utilize this cross-time/cross-country variation in institutions and privatization methods to analyze the determinants and effects of individual investor control in a large sample of firms in 11 CEE countries over the period 2000-2007. Controlling for possible endogeneity and firm effects, we find that large individual investors add value to the firms they control. They do so predominantly compared to state controlled firms but also compared to other privately controlled firms. If large individual investor firms employ professional managers and (only) supervise them actively, they achieve the better performance improvements in Tobin's q than the firms managed by their controlling shareholders. Concerning the determinants of ownership, large individual shareholders substitute for missing good country governance institutions, and ownership is very sticky, since initial conditions (privatization methods) still matter. It appears that secondary markets do not converge on the same ownership equilibria as primary markets do.


Press 'enter' for creating the tag

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Corporate Finance
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-B, VW-C, WH-A
Language English
Title Ownership and Control in Central and Eastern Europe
Volume 26
Year 2014
Page from 145
Page to 163
Reviewed? Y
URL http://www.sciencedirect.com/science/article/pii/S0929119914000212
DOI http://dx.doi.org/10.1016/j.jcorpfin.2014.03.001


Gugler, Klaus (Details)
Zechner, Josef (Details)
Ivanova, Natalia (Universit├Ąt Wien, Austria)
Research Institute for Regulatory Economics FI (Details)
Department of Economics (Gugler) (Details)
Research Institute for Family Business FI (Details)
Institute for Finance, Banking and Insurance IN (Details)
Google Scholar: Search