Ownership concentration impact on financial performance : evidence from Serbia

Vasilić, Nikola (2018) Ownership concentration impact on financial performance : evidence from Serbia. In: Fifth International Scientific Conference Contemporary Issues in Economics, Business and Management. Faculty of Economics, Kragujevac, pp. 111-120. ISBN 978-86-6091-082-2

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Abstract

Separation of ownership and management function in modern corporations resulted in the
emergence of a conflict between principal (shareholders) and agent (top management). According to
agency theory ownership concentration is a key mechanism that helps to mitigate principal-agent
problem. As a result of the underdevelopment of the legal system and the corporate control market in
transition economies and developing countries, the application of ownership concentration mechanism
can lead to the emergence of a new conflict on the relationship between majority and minority
shareholders. High ownership concentration allows the majority owner to use corporate resources in
accordance with private goals, which negatively affects the value for minority shareholders and
corporate performance. Accordingly, this research deals with the analysis of concentrated ownership
impact on financial performance, measured by the Return on Asset (ROA) and Return on Equity (ROE).
Empirical research was conducted for the period 2015-2017 on the sample of 70 non-financial
companies, which shares are traded on the Belgrade Stock Exchange. The results of the applied statistical
analysis methods show that ownership concentration greater than 55% has a negative impact on ROA
and ROE.

Item Type:	Book Section
Additional Information:	COBISS.ID=513825116
Uncontrolled Keywords:	corporate governance, ownership concentration, agency problem, financial performance, transition economies
Research Department:	Innovation Economics
Depositing User:	Jelena Banovic
Date Deposited:	19 Oct 2022 10:50
Last Modified:	19 Oct 2022 10:50
URI:	http://35.240.28.64/id/eprint/1804
Author Links:	[error in script] No links available.

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