Equity Block Transfers in Transition Economies: Evidence from Poland
Posted: 10 Jan 2009
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Equity Block Transfers in Transition Economies: Evidence from Poland
Equity Block Transfers in Transition Economies: Evidence from Poland
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
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