Corporate efficiency in Europe

Hanousek, Jan, Kocenda, Evzen and Shamshur, Anastasiya (2015) Corporate efficiency in Europe. Journal of Corporate Finance, 32 (3). 24–40.

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Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm’s equity. In the analysis, we distinguish between a pre-crisis period (2001–2008) and a post-crisis period (2009-2011), and find that our results are sensitive to the period of observation.

Item Type: Article
Uncontrolled Keywords: efficiency,ownership structure,stochastic frontier,europe,firms,panel data
Faculty \ School: Faculty of Social Sciences > Norwich Business School
UEA Research Groups: Faculty of Social Sciences > Research Groups > Finance Group
Depositing User: Pure Connector
Date Deposited: 25 Mar 2015 18:23
Last Modified: 21 Oct 2022 00:47
DOI: 10.1016/j.jcorpfin.2015.03.003

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