Financial Efficiency and the Ownership of Czech Firms

Evžen Kočenda, Jan Hanousek and Michal Masika

No wp1016, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: In this paper we analyze the evolution of firm financial efficiency in the Czech Republic. 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 version of a stochastic production frontier model for the period 1996–2007 with time-invariant efficiency. We differentiate among various degrees of ownership concentration 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: pages
Date: 2011-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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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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Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:2011-1016

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