Ownership Concentration and Corporate Performance on the Budapest Stock Exchange: Do Too Many Cooks Spoil the Goulash?

John Earle, Csaba Kucsera and Almos Telegdy
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Csaba Kucsera: University Budapest and Central European University

No 03-93, Upjohn Working Papers from W.E. Upjohn Institute for Employment Research

Abstract: We examine the impact of ownership concentration on firm performance using panel data for firms listed on the Budapest Stock Exchange, where ownership tends to be highly concentrated and frequently involves multiple blocks. Fixed-effects estimates imply that the l largest block increases return on assets and operating efficiency strongly and monotonically, but the effects of total blockholdings are much smaller and statistically insignificant. Controlling for the size of the largest block, point estimates of the marginal effects of additional blocks are negative. The results suggest that the marginal costs of concentration may outweigh the benefits when the increased concentration involves "too many cooks."

Keywords: Budapest; stock; exchange; ownership; concentration; Earle; Upjohn (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2003-07
New Economics Papers: this item is included in nep-cfn
Note: A revised version of this paper appears in Corporate Governance, 13(2), 1-11, March 2005.
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: Ownership Concentration and Corporate Performance on the Budapest Stock Exchange: do too many cooks spoil the goulash? (2005)
Working Paper: Ownership Concentration and Corporate Performance on the Budapest Stock Exchange: Do Too Many Cooks Spoil the Goulash?
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