Determinants of Foreign Ownership in Newly Privatized Companies in Transition Economies |
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Authors: | Christopher W. Anderson Tomas Jandik Anil K. Makhija |
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Affiliation: | University of Kansas;University of Arkansas;The Ohio State University |
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Abstract: | We investigate determinants of foreign ownership in newly privatized firms. We analyze data on privatized Czech firms to address two related general questions. First, what characteristics distinguish transition firms that attract a foreign investor? Second, how do firm‐specific characteristics influence the size of the foreign equity stake? Our results suggest that foreign investors i) seek safe, profitable firms in which they can exert unchallenged influence on corporate governance and then ii) structure their equity stakes to mitigate agency costs and political risk. |
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Keywords: | privatization ownership structure foreign investment block holders |
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