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Competition and ownership structure: Substitutes or complements? Evidence from the Warsaw Stock Exchange†
Article first published online: 28 JUN 2008
DOI: 10.1111/1468-0351.t01-1-00124
The European Bank for Reconstruction and Development, 2002
1468-0351/asset/cover.gif?v=1&s=2ee37afb0920ce1ad2a2f32331985fbd0b577875 "Economics of Transition")
Additional Information
How to Cite
Grosfeld, I. and Tressel, T. (2002), Competition and ownership structure: Substitutes or complements? Evidence from the Warsaw Stock Exchange. Economics of Transition, 10: 525–551. doi: 10.1111/1468-0351.t01-1-00124
Publication History
- Issue published online: 28 JUN 2008
- Article first published online: 28 JUN 2008
Keywords:
- Ownership structure;
- competition;
- corporate governance;
- Warsaw stock exchange
In this paper we analyse the impact of product market competition and ownership structure on firm performance. Our results show that product market competition has a positive and significant impact on performance. Concerning the effect of ownership concentration, we find a U–shaped relationship with performance. Firms with relatively dispersed and relatively concentrated ownership have higher productivity growth than firms with an intermediate level of ownership concentration. This correlation between concentration of ownership and productivity growth is not explained by the type of the controlling shareholder. Finally, product market competition and good governance tend to reinforce each other rather than to be substitutes. Competition has no significant effect on performance for the firms with ‘poor’ governance; on the contrary, it has a significant positive effect in the case of firms with ‘good’ corporate governance.
JEL classification: D24, G32, L1, P2.