Author: Roland EgererPublisher: World Bank Publications
ISBN:
Category : Capital market
Languages : en
Pages : 56
Book Description
Capital Markets, Financial Intermediaries, and Corporate Governance
Author: Roland EgererPublisher: World Bank Publications
ISBN:
Category : Capital market
Languages : en
Pages : 56
Book Description
Capital Markets, Financial Intermediaries, and Corporate Governance: An Empirical Assessment of the Top Ten Voucher Fund
Author: Roland EgererPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
December 1995 Many expected mass privatization to result in widely dispersed ownership and weak external governance of firms. But Czech investment funds -- now key players in equity markets -- are monitoring and influencing corporations on behalf of small investors. Meanwhile, a close relationship between Czech banks and corporations (with banks as both lenders and shareholders in investment funds) has reduced banks? risk and their cost of getting information about and monitoring firms' performance. Voucher privatization was expected to result in widely dispersed ownership with little effect on firms' governance. But in the first wave of privatization, more than 70 percent of Czech vouchers went to investment funds and the 10 largest Czech and Slovak investment funds (surveyed for this study) acquired roughly half of all voucher points. And the large funds can influence corporate governance. A fund holding large stakes (up to 20 percent) in a single enterprise can appoint directors to the board, help select management, and otherwise monitor corporate decision-making. A fund's actual role depends on the sponsoring institution's or individual's incentive structure. Foreign bank-sponsored and nonbank funds are stronger corporate monitors than funds sponsored by domestic banks. Banks and investment funds lack the skills and incentives to initiate corporate restructuring, but funds with significant stakes can readily compare managers' performance and remove underperform-ing executives and can counterbalance the control of management and employees. Funds can also effectively monitor firms on behalf of groups of small investors. After privatization, most Czech assets are now owned by funds affiliated with banks. In market economies, a close relationship between banks and enterprises may be seen as a conflict of interest. In transition economies -- where information costs are high because corporate performance is not transparent and where collateral-based lending remains fraught with uncertainty -- banks and funds have spontaneously developed a relationship as a way for banks to get information about firm performance. Bank-sponsored funds reduce banks' information and monitoring costs and hence lending risk and costs. They also facilitate the informal workout of problem loans. This paper -- a product of the Finance and Private Sector Development Team, Technical Department, Europe and Central Asia, and Middle East and North Africa Regions -- is part of a larger effort in the Bank to analyze the restructuring in transition economies.
Capital Markets, Financial Intermediaries and Corporate Governance
Author: Roland EgererPublisher:
ISBN:
Category : Bancos - Republica Checa
Languages : en
Pages : 45
Book Description
Population Growth, Factor Accumulation, and Productivity
Author: Lant PritchettPublisher: World Bank Publications
ISBN:
Category : Capital
Languages : en
Pages : 44
Book Description
Catching Up with Eastern Europe?
Author: Bernard M. HoekmanPublisher: World Bank Publications
ISBN:
Category : Acuerdos internacionales - Europa oriental
Languages : en
Pages : 44
Book Description
In Search of Price Rigidities
Author: Jacques MorissetPublisher: World Bank Publications
ISBN:
Category : Analisis econometrico
Languages : en
Pages : 36
Book Description
A Firm-level Analysis of Small and Medium Size Enterprise Financing in Poland
Author: Leora KlapperPublisher:
ISBN:
Category : Service industries
Languages : en
Pages : 48
Book Description
"The authors test competing theories of capital structure choices using firm-level data on firm borrowings. The majority of firms in the dataset are privately owned, young, micro or small and medium enterprise (SME) firms concentrated in the service sector. In general, the financing pattern of firms is low leverage ratios and, in particular, low levels of intermediated financing and long-term financing. Average firm growth rates decreased during the five years of the sample period. Average profitability growth ratios are also negative across age and sectors and large firms have the highest negative profit growth rates. Statistical tests find a positive firm size effect on financial intermediation. Larger firms have higher leverage ratios (both short term and long term), including higher use of trade credit. There is also a negative influence of profitability on leverage ratios (more profitable firms use less external financing), which supports the "pecking order" theory that in environments with greater asymmetric information (such as weaker credit information) firms prefer to use internal or inter-firm financing. Finally, firms operating in a competitive environment have higher leverage ratios. For instance, young, small firms are the most active employment generators in the Polish economy. In particular, the authors find that although SMEs seem to be very active in creating jobs in recent years. This suggests that a new type of firm is emerging that is more market and profit-oriented. But at the same time, these firms appear to have financial constraints that impede their growth. Improvements in the business environment, such as better credit and registry information, could help promote growth in this sector. "--World Bank web site.
Post-Soviet Geography and Economics
Author: Post-Soviet Geography
Author: Privatization and Public Policy
Author: Vincent WrightPublisher:
ISBN:
Category : Industrial policy
Languages : en
Pages : 568
Book Description