Ownership and Corporate Governance--Evidence from the Czech Republic
Author: Stijn Claessens, Simeon Djankov, and Gerhard Pohl Date: 5/1/1997 (PDF, 200KB)
Stijn Claessens, Simeon Djankov, and Gerhard Pohl argue that mass privatization in the Czech Republic has spurred enterprise restructuring and that investment funds have played a key part in this outcome. Using 1992-95 data for more than 700 Czech firms, the authors find strong positive relationships between ownership concentration and profitability. And the higher the ownership concentration, the higher the firm's market value. They argue that these two results suggest that the Czech privatization program was effective in improving firms' management because of the concentrated ownership that resulted.