Competition and Ownership Structure: Substitutes or Complements? Evidence from the Warsaw Stock Exchange

27 Pages Posted: 4 Jan 2003

See all articles by Irena Grosfeld

Irena Grosfeld

Paris School of Economics

Thierry Tressel

International Monetary Fund (IMF) - Research Department

Abstract

In this paper we analyse the impact of product market competition and ownership structure on firm performance. Our results show that product market competition has a positive and significant impact on performance. Concerning the effect of ownership concentration, we find a U-shaped relationship with performance. Firms with relatively dispersed and relatively concentrated ownership have higher productivity growth than firms with an intermediate level of ownership concentration. This correlation between concentration of ownership and productivity growth is not explained by the type of the controlling shareholder. Finally, product market competition and good governance tend to reinforce each other rather than to be substitutes. Competition has no significant effect on performance for the firms with "poor" governance; on the contrary, it has a significant positive effect in the case of firms with "good" corporate governance.

Suggested Citation

Grosfeld, Irena and Tressel, Thierry, Competition and Ownership Structure: Substitutes or Complements? Evidence from the Warsaw Stock Exchange. The Economics of Transition, Vol. 10, pp. 525-551, 2002. Available at SSRN: https://ssrn.com/abstract=342541

Irena Grosfeld (Contact Author)

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014
France

Thierry Tressel

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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