Corporate efficiency in Europe

Jan Hanousek, Evžen Kočenda and Anastasiya Shamshur

Journal of Corporate Finance, 2015, vol. 32, issue C, 24-40

Abstract: Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm's equity. In the analysis, we distinguish between a pre-crisis period (2001–2008) and a post-crisis period (2009–2011), and find that our results are sensitive to the period of observation.

Keywords: Efficiency; Ownership structure; Firms; Panel data; Stochastic frontier; Europe (search for similar items in EconPapers)
JEL-codes: C33 D24 G32 L60 L80 M21 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

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Working Paper: Corporate Efficiency in Europe (2015)
Working Paper: Corporate Efficiency in Europe (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:32:y:2015:i:c:p:24-40

DOI: 10.1016/j.jcorpfin.2015.03.003

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