Economics and Systemic Explanations of Ownership Concentration among Europe's Largest Companies

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    Abstract

    The paper examines causes and effects of ownership concentration among the largest companies in 12 European countries. As a reference point the paper takes a seminal empirical study on US data and examines to what extent the model is applicable in European countries. The findings indicate that both general economic effects and system effects are significant. Ownership concentration is found to decrease with firm size and to increase with earnings volatility. But in support of the system theories advocated nationality is also found to have a significant effect which is partly attributable to institutional differences between nations such as stock market size and the frequency of large banks. Finally ownership concentration is found to have an insignificant effect on accounting profitability (return on equity).
    Original languageEnglish
    JournalInternational Journal of the Economics of Business
    Volume6
    Issue number3
    Pages (from-to)367-381
    Number of pages15
    ISSN1357-1516
    DOIs
    Publication statusPublished - 1999

    Keywords

    • European ownership concentration
    • Corporate governance

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