Equity Block Transfers in Transition Economies: Evidence from Poland

Posted: 10 Jan 2009

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Abstract

This paper investigates valuation effects of share block transfers and employs agency theory to explain the determinants of equity block premia. A sample of transactions from Poland is used to measure benefits and costs of ownership concentration. Block premia are found to be remarkably low and comparable with those for the most developed economies. Shareholders expect to benefit from intensified monitoring and from corporate restructuring resulting from block acquisitions. Still, shareholders are wary of expropriation stemming from the extraction of private benefits of control by block holders. The opportunities to extract such benefits depend on relative power of investors.

Keywords: Agency problems, Corporate governance, Ownership structure, Block trades, Transition economies

JEL Classification: G30, G32, G34

Suggested Citation

Trojanowski, Grzegorz, Equity Block Transfers in Transition Economies: Evidence from Poland. Economic Systems, Vol. 32, No. 3, 2008, Available at SSRN: https://ssrn.com/abstract=1324514

Grzegorz Trojanowski (Contact Author)

University of Exeter Business School

Xfi Centre for Finance and Investment
Rennes Drive
Exeter, Devon EX4 4ST
United Kingdom

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