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Corporate Governance and Equity Prices: Evidence from the Czech and Slovak Republics

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  • Claessens, Stijn

Abstract

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. The author finds 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. Copyright 1997 by American Finance Association.

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  • Claessens, Stijn, 1997. "Corporate Governance and Equity Prices: Evidence from the Czech and Slovak Republics," Journal of Finance, American Finance Association, vol. 52(4), pages 1641-1658, September.
    • Handle: RePEc:bla:jfinan:v:52:y:1997:i:4:p:1641-58
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    1. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. "The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-452, June.
    2. Anderson, Robert E., 1994. "Voucher funds in transitional economies : the Czech and Slovak experience," Policy Research Working Paper Series 1324, The World Bank.
    3. Cable, John R, 1985. "Capital Market Information and Industrial Performance: The Role of West German Banks," Economic Journal, Royal Economic Society, vol. 95(377), pages 118-132, March.
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