News Column

Data on Corporate Finance Detailed by Researchers at University of Vienna (Ownership and control in Central and Eastern Europe)

July 5, 2014

By a News Reporter-Staff News Editor at Investment Weekly News -- Current study results on Corporate Finance have been published. According to news reporting originating in Vienna, Austria, by VerticalNews journalists, research stated, "The unique natural experiment of the fall of the iron curtain led to large institutional and governance differences across countries. This allows us to observe the evolution of ownership and control after an initial shock."

The news reporters obtained a quote from the research from the University of Vienna, "We utilize this cross-time/cross-country variation in institutions and privatization methods to analyze the determinants and effects of individual investor control in a large sample of firms in 11 CEE countries over the period 2000-2007. Controlling for possible endogeneity and firm effects, we find that large individual investors add value to the firms they control. They do so predominantly compared to state controlled firms but also compared to other privately controlled firms. If large individual investor firms employ professional managers and (only) supervise them actively, they achieve the better performance improvements in Tobin's q than the firms managed by their controlling shareholders. Concerning the determinants of ownership, large individual shareholders substitute for missing good country governance institutions, and ownership is very sticky, since initial conditions (privatization methods) still matter."

According to the news reporters, the research concluded: "It appears that secondary markets do not converge on the same ownership equilibria as primary markets do."

For more information on this research see: Ownership and control in Central and Eastern Europe. Journal of Corporate Finance, 2014;26():145-163. Journal of Corporate Finance can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier -; Journal of Corporate Finance -

Our news correspondents report that additional information may be obtained by contacting K. Gugler, Vienna Univ Econ & Business WU, Dept. of Finance, A-1090 Vienna, Austria. Additional authors for this research include N. Ivanova and J. Zechner.

Keywords for this news article include: Vienna, Europe, Austria, Corporate Finance

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Source: Investment Weekly News

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