Block Trades and the Benefits of Control in Slovenia

36 Pages Posted: 10 Dec 2008

See all articles by Aleksandra Gregoric

Aleksandra Gregoric

Copenhagen Business School

Cristina Vespro

ECARES, Université Libre de Bruxelles; European Corporate Governance Institute (ECGI)

Abstract

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.

Suggested Citation

Gregoric, Aleksandra and Vespro, Cristina, Block Trades and the Benefits of Control in Slovenia. Economics of Transition, Vol. 17, Issue 1, pp. 175-210, January 2009, Available at SSRN: https://ssrn.com/abstract=1314538 or http://dx.doi.org/10.1111/j.1468-0351.2009.00332.x

Aleksandra Gregoric

Copenhagen Business School ( email )

Porcelænshaven 24
Frederiksberg C, DK - 2000
Denmark

Cristina Vespro

ECARES, Université Libre de Bruxelles ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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