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Ownership Concentration and Performance Recovery Patterns in the European Union

Alexandra Horobet (), Lucian Belascu, Ștefania Cristina Curea () and Alma Pentescu ()
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Alexandra Horobet: Department of International Business and Economics, Bucharest University of Economic Studies, 010374 Bucharest, Romania
Ștefania Cristina Curea: Department of Financial and Economic Analysis and Valuation, Bucharest University of Economic Studies, 010374 Bucharest, Romania
Alma Pentescu: Department of Management, Marketing and Business Administration, “Lucian Blaga” University of Sibiu, 550324 Sibiu, Romania

Sustainability, 2019, vol. 11, issue 4, 1-31

Abstract: Our study addresses the link between ownership concentration and corporate performance in the manufacturing sector in the European Union in an economic environment stressed by the global financial and sovereign debt crises. This is, to our knowledge, the first attempt to tackle differences between companies with different origin-countries in EU from the perspective of ownership concentration and corporate performance in a period marked by the adverse impact of the global financial crisis. Ownership concentration is measured by the number of shareholders and the percentage of their individual and collective holdings, while performance is measured by accounting-based and market-based indicators. Our results, based on a detailed and methodical statistical analysis, show a clear division between Western and Eastern companies in terms of ownership concentration and performance, with an impact on businesses’ recovery patterns. Overall, there is a positive link between ownership concentration and corporate performance in the case of Western companies, but not for Eastern-based companies. Moreover, ownership concentration has supported business recovery in EU, but particularly for Western companies. On the other hand, our results suggest that market investors’ assessment of corporate performance is disconnected from business fundamentals and do not acknowledge the role of ownership concentration (either beneficial of detrimental) for performance assessment.

Keywords: ownership concentration; corporate performance; European Union; recovery; crisis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
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