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Institute of Public Finance

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Concentration of ownership and corporate performance: evidence from the Zagreb Stock Exchange

Alen Džanić

This study examines the relationship between ownership structure and firm performance using a sample of firms listed on the Zagreb Stock Exchange in period 2003-2009. The results obtained using a panel estimation with fixed effects show a significant negative relationship between the existence of a block holder owning more than 30% of the equity and the value of the firm's Tobin's Q. However, if there is a family-type second block holder, the effect disappears. Further, the study gives evidence of the negative impact of the fraction of equity owned by management on labor efficiency confirming the quiet-life hypothesis from Bertrand and Mullainathan (2003). Finally, it is shown that foreign ownership is not significantly better than domestic.

Keywords:  ownership structure, ownership concentration, Tobin's Q, return on equity, labor efficiency, block holder, management ownership, Croatia, Zagreb Stock Exchange

Year:  2012   |   Volume:  36   |   Issue:  1   |   Pages:  29 - 52   

Full text (PDF)   |   DOI: 10.3326/fintp.36.1.2   |   E-mail this article   |   Download to citation manager
 March, 2012
I / 2012
EBSCO Publishing
ISSN 1846-887X
e-ISSN 1845-9757
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