Can the Market Fix a Wrong Administrative Decision? Massive Delisting on the Prague Stock Exchange

Zuzana Fungáčová

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: This research contributes to the investigation of the emerging stock markets in transition economies, namely in the Czech Republic. We estimate the impact of the various determinants of shares delisting e.g. exclusion from public trading on the Prague Stock Exchange (PSE) during the period 1993 – 2004. Unlike its counterparts in Poland or Hungary, exceptionally large amounts of shares were delisted from the PSE. Using the data on listed and delisted companies we show that the pre-privatization and privatization characteristics of the companies were decisive for delisting. This further indicates that it would have been possible to prevent massive delisting if these factors had been taken into account when deciding which companies to place on the stock exchange for public trading. Moreover, therefore companies that were not suitable for public trading were also not suitable for voucher privatization.

Keywords: Mass privatization; stock market; delisting; transition economy. (search for similar items in EconPapers)
JEL-codes: G15 G28 P34 (search for similar items in EconPapers)
Date: 2007-08
New Economics Papers: this item is included in nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp335

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