Ownership Concentration, Market Monitoring and Performance: Evidence from the UK, the Czech Republic and Poland

Posted: 1 Jun 2005

See all articles by Vahe Lskavyan

Vahe Lskavyan

Ohio University

Mariana Spatareanu

Rutgers University Department of Economics and Division of Global Affairs

Abstract

Using data for publicly traded companies from the UK and two transition countries, the Czech Republic and Poland, we analyze the relationship between ownership concentration and performance while also accounting for the effect of hostile takeover threats on this relationship. Some argue that ownership concentration will improve performance by making the owners more willing or able to monitor managers. Others argue that in the presence of efficient markets, market monitoring (via the threat of hostile takeovers) will discipline the managers. Our results show that concentration is insignificant in explaining performance both in the transition countries, where market monitoring is supposedly weak, and in the UK, where market monitoring is supposedly strong.

Keywords: Ownership Concentration, Markets for Corporate Control

JEL Classification: G32, G34

Suggested Citation

Lskavyan, Vahe and Spatareanu, Mariana, Ownership Concentration, Market Monitoring and Performance: Evidence from the UK, the Czech Republic and Poland. Journal of Applied Economics, Vol. 9, No. 1, pp. 91-104, May 2006, Available at SSRN: https://ssrn.com/abstract=733683

Vahe Lskavyan (Contact Author)

Ohio University ( email )

Athens, OH 45701-2979
United States

Mariana Spatareanu

Rutgers University Department of Economics and Division of Global Affairs ( email )

360 ML King Jr. Blvd.
Newark, NJ 07102
United States
973 353 5249 (Phone)
973 353 5819 (Fax)

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