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

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  • Alen Dzanic

Abstract

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.

Suggested Citation

  • Alen Dzanic, 2012. "Concentration of ownership and corporate performance: evidence from the Zagreb Stock Exchange," Financial Theory and Practice, Institute of Public Finance, vol. 36(1), pages 29-52.
    • Handle: RePEc:ipf:finteo:v:36:y:2012:i:1:p:29-52
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    Cited by:

    1. Kashif Rashid & Seep Nadeem, 2014. "The Role of Ownership Concentration, its Types and Firm Performance: A Quantitative Study of Financial Sector in Pakistan," Oeconomics of Knowledge, Saphira Publishing House, vol. 6(2), pages 10-61, June.
    2. Zorica Kalezić, 2015. "Ownership Concentration and Firm Performance in Transition Economies: Evidence from Montenegro," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(3), pages 5-64.

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