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Ownership Structure And Firm Exit Routes

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  • Darja Peljhan
  • Katja Zajc Kejžar
  • Nina Ponikvar

Abstract

Our study presents empirical evidence about the role of ownership structure for firm exit probability by explicitly differentiating between distinct exit routes (bankruptcy and forced liquidation, voluntary liquidation, mergers and acquisitions – M&A, and removal from the court register). Based on the population of Slovenian firms in the 2006–2012 period and using multinomial probit, our findings support the predictions of agency theory. Ownership concentration, share of the largest owner, and the difference in shares between two largest owners all decrease the likelihood of exit for all studied exit routes but M&A. The magnitude of their impact is largest for exits, in which owners play a decisive role, i.e. voluntary liquidation and removal. The link between the number of primary owners and exit likelihood is U-shaped with the lowest exit probability for firms with around two owners.

Suggested Citation

  • Darja Peljhan & Katja Zajc Kejžar & Nina Ponikvar, 2020. "Ownership Structure And Firm Exit Routes," Applied Economics, Taylor & Francis Journals, vol. 52(15), pages 1671-1686, March.
    • Handle: RePEc:taf:applec:v:52:y:2020:i:15:p:1671-1686
    DOI: 10.1080/00036846.2019.1677850
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    Cited by:

    1. Jože Damijan & Jozef Konings & Črt Kostevc & Katja Zajc Kejžar, 2022. "Explaining the Low Level of Investment in Slovenia," European Economy - Discussion Papers 169, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Mohamad Azwan Md Isa & Norashikin Ismail & Mohd Halim Kadri, 2024. "Sustainability Performance and Corporate Financial Stability of Shariah-Compliant Companies in Malaysia: The Moderating Effects of Ownership Concentration," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(14), pages 28-46, October.
    3. Stef, Nicolae & Bissieux, Jean-Joachim, 2022. "Resolution of corporate insolvency during COVID-19 pandemic. Evidence from France," International Review of Law and Economics, Elsevier, vol. 70(C).
    4. Zuluaga Arango, Paula & Rincón, Diego Useche & RojasBerrio, Sandra Patricia, 2023. "Relevancia, evolución y tendencias de la supervivencia empresarial. Una revisión de literatura en finanzas," Revista Tendencias, Universidad de Narino, vol. 24(1), pages 252-278, January.

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