Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324123 
Year of Publication: 
2024
Citation: 
[Journal:] PSL Quarterly Review [ISSN:] 2037-3643 [Volume:] 77 [Issue:] 311 [Year:] 2024 [Pages:] 511-529
Publisher: 
Associazione Economia civile, Rome
Abstract: 
We apply panel estimation techniques to full population of Austrian corporations from 2007-2020 in order to analyze the impact of ownership concentration on performance. Return on investment (ROI) is lower than cost of capital, which insinuates that managers invest beyond optimal investment level instead of maximizing shareholders' wealth. ROI for pyramidal firms is 35% lower than cost of capital implying that managers pursue their objectives. State-owned firms' ROI is 28% lower than cost of capital showing that discretionary investments lead to sub-optimal performance. An inverted U-curve is estimated with a turning point at 69% voting rights, beyond which entrenchment effect dominates the incentives effect for 37% firms. This evidence confirms minority shareholders' expropriation, which has repercussions for efficient governance in Austrian corporations.
Subjects: 
entrenchment effect
incentives effect
marginal q
return on investment
ultimate ownership
JEL: 
L2
G3
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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