Osteuropa-Institut Regensburg Working Paper No. 300
38 Pages Posted: 19 Jul 2011
Date Written: May 1, 2011
In this paper we analyze the evolution of firm financial efficiency in the Czech Republic. Using a large panel of more than 400,000 Czech firm/years we study whether firms fully utilize their resources, how firm financial efficiency evolves over time, and how firm financial efficiency is determined by ownership structure. We employ a panel version of a stochastic production frontier model for the period 1996-2007 with time-invariant efficiency. We differentiate among various degrees of ownership concentration and their domestic or foreign origin. In a two-stage set-up we estimate the degree of firm inefficiency and then we estimate the effect of ownership structure on the distance from the efficiency frontier. Our results support the hypothesis that concentration and foreign ownership are positively related to financial efficiency.
Keywords: financial efficiency, ownership structure, firms, panel data, stochastic frontier
JEL Classification: C33, D24, G32, L60, L80, M21
Suggested Citation: Suggested Citation
Hanousek, Jan and Kocenda, Evzen and Masika, Michal, Financial Efficiency and the Ownership of Czech Firms (May 1, 2011). Osteuropa-Institut Regensburg Working Paper No. 300 . Available at SSRN: https://ssrn.com/abstract=1888426 or http://dx.doi.org/10.2139/ssrn.1888426