Block Trades and the Benefits of Control in Slovenia
Copenhagen Business School - Department of International Economics and Management, Centre for Corporate Governance
ECARES, Université Libre de Bruxelles; European Corporate Governance Institute (ECGI)
Economics of Transition, Vol. 17, Issue 1, pp. 175-210, January 2009
Ownership and control have been concentrating in most transition countries. The consolidation of control introduces changes in the power distribution within privatized firms and, most importantly, redirects the corporate governance problem to a conflict between large and small shareholders. In this study, we evaluate the ownership changes in Slovenian privatized firms through an analysis of stock price reactions to the entrance of a new blockholder (the shared benefits of control) and through an estimation of the premiums paid for large blocks (the private benefits of control). We provide evidence of and discuss the reasons for the failures of the privatization investment funds in implementing control over firm managers and in promoting the restructuring of firms in the first post-privatization years.
Number of Pages in PDF File: 36Accepted Paper Series
Date posted: December 10, 2008
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