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Regular version of the site

Article

The affects of ownership concentration on Investment and performance in privatized firms in Russia

Managerial and Decision Economics. 2001. No. v. 22 No6. P. 299-313.
Kapeliushnikov R., Filatochev I., Demina N., Aukutsionek S.

This paper provides new survey evidence on effects of concentrated ownership on restructuring and performance in privatized firms in Russia. The major findings are that large-block shareholding is negatively associated with the firm's investment and performance, and this relationship does not depend on the identity of controlling shareholders. These results are consistent with the assumption that when minority shareholders' rights are not adequately protected, the entrenched controlling shareholders may be engaged in extracting ‘control premium’ before pro rata distribution of dividends. The issues raised have relevance to other transitional economies where the privatization process has been followed by an increase in ownership concentration.