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Managerial ownership and corporate performance in Slovenian post-privatisation period

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  • Marko Simoneti
  • Aleksandra Gregoric
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    Abstract

    The Slovenian post-privatisation period has been characterised by a decline in the ownership by non-managerial owners (employees) and state-controlled funds. On the other hand, domestic and foreign non-financial firms, Privatisation Investment Funds and managers have been increasing their holdings. The latter, namely the growing managerial ownership, is likely to feature in future ownership dynamics in Slovenia. In fact, in 2002 the desired (optimal) ownership stakes estimated by Slovenian managers were 10.8 percentage points higher than their actual stakes. The aim of our paper is to describe the main trends in the ownership of Slovenian corporations in the post-privatisation period and to provide an answer to the basic economic question: what is the influence of the ongoing consolidation of managerial ownership on the performance of Slovenian firms. The empirical analysis testing this relationship is based on a panel of 182 Slovenian firms in the 1995-99 period and does not provide relevant evidence of any positive effects of the increasing managerial control on Slovenian firms' performance. If any, a positive incentive effect is only observed in those firms whose managers' holdings exceed 10-percent, only with regards to firms' financial performance (but not total factor productivity) and only in firms that are not listed on the capital market. Further, the negative effect of the current gap between the desired and actual managerial ownership seems to exceed any positive incentive effect arising out of managerial ownership.

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    Bibliographic Info

    Article provided by Cattaneo University (LIUC) in its journal The European Journal of Comparative Economics.

    Volume (Year): 1 (2004)
    Issue (Month): 2 (December)
    Pages: 217-241

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    Handle: RePEc:liu:liucej:v:1:y:2004:i:2:p:217-241

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    Keywords: managerial ownership; ownership consolidation; corporate performance; corporate governance; transparency;

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    References

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    Cited by:
    1. Dejan Eric & Ivan Stosic, 2011. "Upgrading Corporate Governance Practice of State Owned Enterprises in Processes of EU Integration – Comparation of Serbia and Slovenia," Book Chapters, Institute of Economic Sciences, Institute of Economic Sciences.
    2. Djuro Djuric & Drasko Nikolic, 2011. "Corporate Reorganization in Republic of Serbia - Lessons from EU Praxis," Book Chapters, Institute of Economic Sciences, Institute of Economic Sciences.
    3. Mulaj, Isa, 2006. "Redefining Property Rights with Specific Reference to Social Ownership in Successor States of Former Yugoslavia: Did it Matter for Economic Efficiency?," MPRA Paper 243, University Library of Munich, Germany.
    4. Saul Estrin & Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "The Effects of Privatization and Ownership in Transition Economies," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 47(3), pages 699-728, September.
    5. Estrin, Saul & Hanousek, Jan & Svejnar, Jan, 2009. "Effects of Privatization and Ownership in Transition Economies," Policy Research Working Paper Series 4811, The World Bank.
    6. Nina Cankar & Simon Deakin & Marko Simoneti, 2008. "The Reflexive Properties of Corporate Governance Codes: The Reception of the 'Comply or Explain' Approach in Slovenia," ESRC Centre for Business Research - Working Papers, ESRC Centre for Business Research wp371, ESRC Centre for Business Research.

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