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Ownership concentration, institutional development and firm performance in Central and Eastern Europe


  • Balsmeier, Benjamin
  • Czarnitzki, Dirk


This paper analyzes the relationship of ownership concentration and firm performance in the context of different institutional environments in 28 Central and Eastern European transition economies. Using the BEEPS data for the period from 2002 to 2009 we find an inverted u-shaped relation of ownership concentration and firm performance for those firms that operate in non-EU-member countries as well as those firms that are situated in less developed legal systems according to Freedom House ratings. We interpret these findings as evidence for a classic agency problem in the lower part of the ownership concentration distribution that is dominated by a 'private benefits of control' problem with rising ownership concentration.

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  • Balsmeier, Benjamin & Czarnitzki, Dirk, 2010. "Ownership concentration, institutional development and firm performance in Central and Eastern Europe," ZEW Discussion Papers 10-096, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:10096

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    1. Ammermüller, Andreas & Dolton, Peter J., 2006. "Pupil-teacher gender interaction effects on scholastic outcomes in England and the USA," ZEW Discussion Papers 06-060, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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    1. repec:prg:jnlpep:v:2017:y:2017:i:6:id:628:p:646-660 is not listed on IDEAS
    2. Zorica Kalezić, 2015. "Ownership Concentration and Firm Performance in Transition Economies: Evidence from Montenegro," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(3), pages 5-64.

    More about this item


    corporate governance; firm growth; transition economies; ownership concentration;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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