Corporate Ownership Structure and Performance in Europe

Jeremy Grant and Thomas Kirchmaier

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: In this paper, we show that ownership structures vary considerably across Europe, and that the dominant form ofownership is not necessarily the most efficient one. These findings are in contradiction to similar research basedon US samples. The results also demonstrate that firms without a dominant shareholder tend to outperform theircountry peer groups. We base our analysis on a new and unique dataset of uniform ownership data of the largest100 firms in the five major European economies. We quantify the differences in ownership by comparing threedistinct ownership structures of firms and relating them to performance. For the first time we employ aHodrick-Prescott Filter, a methodology widely used in macroeconomics to isolate the trend growth componentsfrom cyclical fluctuations, to estimate the share price trend of each firm. We take this trend as a good indirectindicator of the quality of governance.

Keywords: Corporate governance; ownership structures; performance; Europe (search for similar items in EconPapers)
JEL-codes: G32 G34 G38 (search for similar items in EconPapers)
Date: 2004-04
New Economics Papers: this item is included in nep-acc, nep-bec, nep-cfn, nep-com, nep-eec and nep-fin
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0631

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