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Can the Market Fix a Wrong Administrative Decision? Massive Delisting on the Prague Stock Exchange

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Author Info
Zuzana Fungacova

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Abstract

This research contributes to the investigation of the emerging stock markets in transition economies, namely in the Czech Republic. We estimate the impact of the various determinants of shares delisting e.g. exclusion from public trading on the Prague Stock Exchange (PSE) during the period 1993 – 2004. Unlike its counterparts in Poland or Hungary, exceptionally large amounts of shares were delisted from the PSE. Using the data on listed and delisted companies we show that the pre-privatization and privatization characteristics of the companies were decisive for delisting. This further indicates that it would have been possible to prevent massive delisting if these factors had been taken into account when deciding which companies to place on the stock exchange for public trading. Moreover, therefore companies that were not suitable for public trading were also not suitable for voucher privatization.

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Publisher Info
Paper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp335.

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Date of creation: Aug 2007
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Handle: RePEc:cer:papers:wp335

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Related research
Keywords: Mass privatization; stock market; delisting; transition economy.;

Find related papers by JEL classification:
G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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This page was last updated on 2009-12-2.


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