Financial Efficiency and the Ownership of Czech Firms

Jan Hanousek, Evžen Kočenda and Michal Mašika

No 300, Working Papers from Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies)

Abstract: In this paper we analyze the evolution of firm financial efficiency in the Czech Repub-lic. Using a large panel of more than 400,000 Czech firm/years we study whether firms fully utilize their resources, how firm financial efficiency evolves over time, and how firm financial efficiency is determined by ownership structure. We employ a panel ver-sion of a stochastic production frontier model for the period 1996–2007 with time-invariant efficiency. We differentiate among various degrees of ownership concentra-tion and their domestic or foreign origin. In a two-stage set-up we estimate the degree of firm inefficiency and then we estimate the effect of ownership structure on the distance from the efficiency frontier. Our results support the hypothesis that concentration and foreign ownership are positively related to financial efficiency.

Keywords: financial efficiency; ownership structure; firms; panel data; stochastic frontier (search for similar items in EconPapers)
JEL-codes: C33 D24 G32 L60 L80 M21 (search for similar items in EconPapers)
Pages: 38
Date: 2011-05
New Economics Papers: this item is included in nep-eff, nep-ifn and nep-tra
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Firm efficiency: Domestic owners, coalitions, and FDI (2012)
Working Paper: Firm Efficiency: Domestic Owners, Coalitions, and FDI (2012)
Working Paper: Financial Efficiency and the Ownership of Czech Firms (2011)
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