Firm or Private Value: What is Behind the Creation of Multiple Blockholder Structures?

28 Pages Posted: 8 Mar 2007

See all articles by Arjana Brezigar Masten

Arjana Brezigar Masten

Institute for Macroeconomic Analysis and Development

Aleksandra Gregoric

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

Katarina Zajc

University of Ljubljana - Faculty of Law

Abstract

The aim of the paper is to delve beyond the mere institutional explanation of the observed ownership dynamic in Slovenia. Therefore, we check whether certain firm-specific, industry and owner-specific factors have been driving the transfer of ownership rights in the post-privatisation period and analyze the impact of the observed changes on firm performance. In order to account for the differences in regulation and in the ability of the existing owners to preserve their rents in corporate voice and returns, we distinguish between listed and non-listed firms and between several types of owners. Our empirical results are in line with theoretical predictions regarding the evolution of the ownership structure in firms (Zwiebel, 1995; Bebchuk and Roe, 1996), functioning and constitution of blockholder coalitions and their effects on firm value (Gomes and Novaes, 2005; Hansmann, 1996; Bennedsen and Wolfenson, 2000). The empirical analysis focuses on Slovenian firms but provides conclusions that, in our view, could be easily extended to other firms undergoing privatisation.

Keywords: corporate governance, blockholders, shareholders coalitions, benefits of control

JEL Classification: G32,G34

Suggested Citation

Brezigar Masten, Arjana and Gregoric, Aleksandra and Zajc, Katarina, Firm or Private Value: What is Behind the Creation of Multiple Blockholder Structures?. EFA 2007 Ljubljana Meetings Paper. Available at SSRN: https://ssrn.com/abstract=967909 or http://dx.doi.org/10.2139/ssrn.967909

Arjana Brezigar Masten (Contact Author)

Institute for Macroeconomic Analysis and Development ( email )

Gregorciceva 27
Ljubljana
Slovenia

Aleksandra Gregoric

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 ECARES ULB CP 114
B-1050 Brussels
Belgium

Katarina Zajc

University of Ljubljana - Faculty of Law ( email )

Dunajska 104
1000 Ljubljana, 1000
Slovenia

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