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Corporate Governance and Equity Prices: Evidence from the Czech and Slovak Republics
Author(s) -
CLAESSENS STIJN
Publication year - 1997
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1997.tb01124.x
Subject(s) - voucher , czech , equity (law) , corporate governance , bidding , slovak , population , business , economics , monetary economics , financial system , accounting , finance , microeconomics , linguistics , philosophy , demography , sociology , political science , law
The Czech and Slovak Republics' mass privatization scheme used voucher points distributed to the population and a competitive bidding process to change the governance of a large number of firms. Voucher prices and following secondary market prices are shown to depend upon the resulting ownership structures. The more concentrated ownership is, the higher prices are. High absolute ownership by a single domestic investor is associated with even higher voucher prices. I find some evidence that initially prices are relatively lower when a bank‐sponsored investment fund has a relatively large stake in a firm. This suggests conflicts of interest.