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Does Corporate Ownership Structure Matter for Economic Growth? A Cross-Country Analysis

Listed author(s):
  • Panayotis Kapopoulos

    (Emporiki Bank, Division of Economic Analysis and Research)

  • Sophia Lazaretou

    ()

    (Bank of Greece, Economic Research Department)

The role of corporations in allocating resources has been of great importance in the debate about the manner in which enterprises should be governed to enhance economic growth. Corporate governance features seem to be central to the dynamics by which successful firms and economies improve their performance over time as well as relative to each other. In this paper we try to clarify the relationship between corporate ownership structure and output growth by using the data of La Porta et al. (1999) on ownership structure of large- and medium-sized corporations in 27 wealthy economies. To search for empirical linkages, we use cross-country growth regressions. The evidence provided in the paper suggests that an environment with a higher percentage of directly and indirectly widely-held companies and a lower degree of state than private ownership is associated with a higher growth rate of per capita income. We also conclude that a higher degree of institutional investment does not seem to enhance the growth performance of an economy.

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File URL: http://www.bankofgreece.gr/BogEkdoseis/Paper200521.pdf
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Paper provided by Bank of Greece in its series Working Papers with number 21.

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Length: 38 pages
Date of creation: Mar 2005
Handle: RePEc:bog:wpaper:21
Contact details of provider: Web page: http://www.bankofgreece.gr

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