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Large shareholders and firm value: Are high-tech firms different?

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Author Info
Irena Grosfeld

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Abstract

This paper explores the relationship between ownership structure and firm value in firms listed on the Warsaw Stock Exchange. The results of the estimations, taking into account simultaneity and reverse causality, show that the relationship between ownership concentration and firm value differs across firms belonging to the sector of innovative technologies and more mature firms. The results give support to the hypothesis that mature firms with higher ownership concentration are likely to perform better than firms with more dispersed ownership. On the other hand, in high-tech companies, with large share of knowledge related activities, higher ownership concentration is associated with lower firm value. This effect is robust to various alternative specifications.

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Paper provided by PSE (Ecole normale supérieure) in its series PSE Working Papers with number 2007-26.

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Date of creation: Sep 2007
Date of revision: Jan 2009
Handle: RePEc:pse:psecon:2007-26

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