Mass Privatisation, Corporate Governance and Endogenous Ownership Structure

Irena Grosfeld and Iraj Hashi ()

William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: We compare the change in ownership concentration in firms privatized through two different programs of mass privatization: the Czech voucher scheme and the Polish program of National Investment Funds. Despite important differences in ownership structure at the start of the process and in the quality of legal and regulatory environments, the emerging ownership patterns are remarkably similar: in the two groups of firms we observe high concentration and the emergence of industrial corporations and individuals as important dominant shareholders. Given the important evolution of ownership, we take ownership structure as endogenous and look at its determinants. We find in particular that ownership concentration depends on the degree of uncertainty in the firm's environment. In a more risky environment firms tend to have more dispersed ownership. We interpret this result in the light of the recent theories of the firm stressing the trade-off between managerial initiative and shareholder control.

Keywords: Corporate governance; privatization; transition; ownership structure (search for similar items in EconPapers)
JEL-codes: G3 L2 P3 P5 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2003-07-01
New Economics Papers: this item is included in nep-cfn and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:2003-596

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