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Do Corporate Control and Product Market Competition Lead to Stronger Productivity Growth? Evidence from Market-Oriented and Blockholder-Based Governance Regimes

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  • Koke, J.
  • Renneboog, L.D.R.

    (Tilburg University, School of Economics and Management)

Abstract

We investigate the impact of corporate governance and product market competition on productivity of German and U.K. firms. We find a strong positive relation between productivity and product market competition and various governance mechanisms. In poorly performing U.K. firms, the presence of strong outside blockholders leads to substantial increases in productivity. In contrast, for poorly performing and distressed German firms, it is bank debt concentration that stimulates productivity growth. Whereas high bank debt concentration also supports productivity growth in profitable German firms, leverage is unrelated to productivity growth in U.K. firms. Weak product market competition in the United Kingdom has a negative impact on productivity growth in both widely held and concentrated firms, with the exception of firms controlled by insiders. For profitable German firms, only control by banks, insurance firms, and the government can somewhat reduce the negative effect of weak product market competition.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

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  • Koke, J. & Renneboog, L.D.R., 2003. "Do Corporate Control and Product Market Competition Lead to Stronger Productivity Growth? Evidence from Market-Oriented and Blockholder-Based Governance Regimes," Other publications TiSEM f5d22b97-5712-4194-939f-0, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:f5d22b97-5712-4194-939f-03b1c3d6a0e4
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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