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Corporate Governance and ‘Principal-Principal’ Conflicts: the Case of the Banking System in Bulgaria

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  • Miroslav Nedelchev

Abstract

The paper examined an important aspect of corporate governance – companies with concentrated ownership. The study uses a modification of model „principal-agent” – “principal-principal”. The paper analyses ownership in the banking system in the case of Bulgaria, incl. the emergence of concentrated ownership. The results show that the transformation of ownership from the state to private capital remains high concentrated, making inapplicable the model „principal-agent”. The practice in Bulgaria can be used only the model „principal-principal”. The conclusion is that for emerging and developing economies to reduce conflicts of the „principal-principal” the external and internal mechanisms should be seen as complementary, in which priority should be given to the institutional environment, i.e. to the external mechanisms.

Suggested Citation

  • Miroslav Nedelchev, 2017. "Corporate Governance and ‘Principal-Principal’ Conflicts: the Case of the Banking System in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 117-135.
    • Handle: RePEc:bas:econst:y:2017:i:1:p:117-135
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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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