Post-Acquisition Performance of Croatian Companies Acquired by Foreigners

5th International conference «Economic Integration, competition and cooperation», Opatija, Croatia, 2005.

16 Pages Posted: 29 Mar 2013 Last revised: 4 May 2013

See all articles by Marija Kastelan Mrak

Marija Kastelan Mrak

University of Rijeka - Faculty of Economics

Danijela Sokolic

University of Rijeka - Faculty of Economics

Nenad Vretenar

University of Rijeka - Faculty of Economics

Date Written: March 27, 2013

Abstract

The issue on whether foreign owners bring prosperity to individual firms and to society is highly debated in Croatia. It arises especially at times when there is a sell-out of a larger Croatian company to a foreign business group. In this paper we study the influence of ownership structures on the financial performance of Croatian companies by comparing firms with a majority share of foreign ownership, with companies that are still dominantly owned by the government privatization fund. We also look at companies privatized through ESOP programs as a third referential group. The study departs from the hypothesis that ownership structures affect governance and so can lead to better firm performance providing owners have the authority to act and possess pertinent information and adequate incentives. We examine a sample of 63 firms for ownership-performance relations and attempt to give explanations of possible reasons why should firms acquired by foreigners, especially company groups, perform better. Our study does indicate that foreign owners achieve better financial performance than other ownership structures. However, based on our research alone, we cannot argue that such performance results solely out of better governance.

Keywords: corporate governance, ownership structures, post acquisition performance, Croatia

Suggested Citation

Mrak, Marija Kastelan and Sokolic, Danijela and Vretenar, Nenad, Post-Acquisition Performance of Croatian Companies Acquired by Foreigners (March 27, 2013). 5th International conference «Economic Integration, competition and cooperation», Opatija, Croatia, 2005.. Available at SSRN: https://ssrn.com/abstract=2240178 or http://dx.doi.org/10.2139/ssrn.2240178

Marija Kastelan Mrak (Contact Author)

University of Rijeka - Faculty of Economics ( email )

Ivana Filipovića 4
Rijeka, 51000
Croatia

Danijela Sokolic

University of Rijeka - Faculty of Economics ( email )

Ivana Filipovića 4
Rijeka, 51000
Croatia

Nenad Vretenar

University of Rijeka - Faculty of Economics ( email )

Ivana Filipovića 4
Rijeka, 51000
Croatia

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