Managerial Ownership and Corporate Performance in Slovenian Post-Privatization Period

35 Pages Posted: 6 Apr 2004

See all articles by Aleksandra Gregoric

Aleksandra Gregoric

University of Ljubljana - Faculty of Economics; European Corporate Governance Institute (ECGI)

Marko Simoneti

University of Ljubljana - Business Law

Date Written: April 2004

Abstract

While Slovenian post-privatization period has been characterized by a decline in the ownership of the non-managerial owners (employees), managers have been increasing their control. Moreover, given that the optimal ownership stake (as stated by the managers) in the year 2002 exceeded their actual share by 10.8 percentage points, we expect the managers to continue consolidating their ownership also in the future. The aim of our paper is to describe the main trends in the ownership of Slovenian corporations in the post-privatization period and to provide an answer to the basic economic question: what is the influence of the ongoing consolidation of managerial ownership on the performance of Slovenian firms. The empirical analysis testing this relationship is based on a panel of 182 Slovenian firms in the period 1995-99 and does not provide relevant evidence on positive effects of the increasing managerial control on the performance of Slovenian firms. If any, positive incentive effect is observed only in the firms with managers' holdings exceeding 10-percent, only with regards to firm financial performance (but not total factor productivity) and only in firms that are not listed on the capital market. Furthermore, the negative effect of the current gap between the optimal and actual managerial ownership seems to prevail over any positive incentive effect arising out of managerial ownership.

Keywords: corporate governance, optimal managerial ownership, ownership and control, corporate performance, ownership gap, incentive effect, entrenchment effect

JEL Classification: G3, G32

Suggested Citation

Gregoric, Aleksandra and Simoneti, Marko, Managerial Ownership and Corporate Performance in Slovenian Post-Privatization Period (April 2004). Available at SSRN: https://ssrn.com/abstract=527183 or http://dx.doi.org/10.2139/ssrn.527183

Aleksandra Gregoric (Contact Author)

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia
+386 1 5892 498 (Phone)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Marko Simoneti

University of Ljubljana - Business Law ( email )

Poljanski nasip 2
Ljubljana, SI-1000
Slovenia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
603
Abstract Views
3,240
rank
62,598
PlumX Metrics