Managerial ownership and corporate performance in Slovenian post-privatisation period

The Slovenian post-privatisation period has been characterised by a decline in the ownership by non-managerial owners (employees) and state-controlled funds. On the other hand, domestic and foreign non-financial firms, Privatisation Investment Funds and managers have been increasing their holdings. The latter, namely the growing managerial ownership, is likely to feature in future ownership dynamics in Slovenia. In fact, in 2002 the desired (optimal) ownership stakes estimated by Slovenian managers were 10.8 percentage points higher than their actual stakes. The aim of our paper is to describe the main trends in the ownership of Slovenian corporations in the post-privatisation period and to provide an answer to the basic economic question: what is the influence of the ongoing consolidation of managerial ownership on the performance of Slovenian firms. The empirical analysis testing this relationship is based on a panel of 182 Slovenian firms in the 1995-99 period and does not provide relevant evidence of any positive effects of the increasing managerial control on Slovenian firms' performance. If any, a positive incentive effect is only observed in those firms whose managers' holdings exceed 10-percent, only with regards to firms' financial performance (but not total factor productivity) and only in firms that are not listed on the capital market. Further, the negative effect of the current gap between the desired and actual managerial ownership seems to exceed any positive incentive effect arising out of managerial ownership.managerial ownership; ownership consolidation; corporate performance; corporate governance; transparency

The Reflexive Properties of Corporate Governance Codes: The Reception of the 'Comply or Explain' Approach in Slovenia

The Slovenian Corporate Governance Code for Public Joint-Stock Companies was adopted in March 2004. Using a systems-theoretical approach, we examine the extent to which the implementation of the Code has resulted in the kinds of 'reflexive' learning processes which the 'comply or explain' approach aims to bring about. The adoption of the Code has already had an impact on the wider legal system, triggering certain changes in the body of core company law, and assisting the process of adjustment to EU-level norms. On the whole, companies' implementation strategies are strikingly similar both in terms of the contents of deviations as well as in the type of disclosure and explanations for deviations. At the same time, the quality of disclosures is low, with effective comply-or-explain declarations representing only a small minority of disclosures. On this basis, the Code has been more effective, to date, in legitimating Slovenia's adjustment to transnational norms and standards, than in stimulating institutional learning.corporate governance, comply or explain, disclosure, reflexive law, EU law, transplants, Slovenia

Secondary Privatization in Slovenia: Evolution of Ownership Structure and Company Performance Following Mass Privatization

This volume contains the output of country research undertaken in Slovenia in 2000-2001 by a team directed by Andreja Bohm and Marko Simoneti under the international comparative project "Secondary Privatization: the Evolution of Ownership Structures of Privatized Enterprises". The project was supported by the European Union's Phare ACE* Programme 1997 (project P97-8201 R) and was coordinated by Barbara Blaszczyk from the Center for Social and Economic Research (CASE) in Warsaw, Poland. The Slovenian research was additionally co-financed by the research grant received by Central and Eastern European Privatization Network from the Ministry of Science and Technology, Republic of Slovenia (V5-9140-98). The support of the ACE Programme made it possible to organize the cooperation of an international group of scholars (from the Czech Republic, France, Poland, Slovenia and the U.K.). The entire project was devoted to the investigation of secondary ownership changes in enterprises privatized in special privatization schemes (i.e., mass privatization schemes and MEBOs**) in three Central European countries - the Czech Republic, Poland and Slovenia. Through a combination of different research methods, such as secondary analysis of previous research, analysis of legal and other regulatory instruments, original field research, statistical data base research and econometric analysis of individual enterprise data, the project aimed to investigate the scope, pace and trends in secondary ownership changes, the factors and barriers affecting them and the degree of ownership concentration resulting from them. In presenting a clear picture of secondary privatization trends in Slovenia, the authors of this volume tried to evaluate the effectiveness of various privatization schemes in terms of their open-endedness (i.e., the degree to which they foster flexibility in adjustments of ownership structures) and in terms of achieving good corporate governance. Additionally, they formulate and examine hypotheses concerning the relationships between changes in the economic performance of enterprises and post-privatization changes in their ownership structures. This report also includes a set of recommendations concerning necessary changes in the regulations and policies governing privatization and capital markets in Slovenia, designed to foster the development of privatized enterprises and to meet the requirements of the process of accession to the European Union. We hope that the results of this research will be of great interest for everyone interested in the little-researched question of what has happened to companies after privatization in transition countries.privatization, secondary transactions, corporate governance, transition economies, Czech Republic, Slovenia, Poland

Promoting Rule Compliance and Good Governance Practice

The paper re-examines the concerns on the rule-based governance in poor institutional environment. By relying on the theories and research vehicles of social psychology, we show that under certain conditions, the ‘law on books’ may still play role in governing market transactions, even though no formal enforcement applies. We furthermore expose the potential of the Corporate Governance Code as the ‘signaling device’ and provide arguments as to why this potential may be even stronger in an environment with relatively weak institutions in comparison to the developed market economies

Pravni in ekonomski vidiki upravljanja družb

This paper provides a critical assessment of existing theoretical approaches to corporate governance within law and economics. Conventional economic approaches to law, new institutionalism and behavioural science, as well as the transplant literature, are discussed and their limits indicated. We suggest that by incorporating novel concepts, such as receptiveness, familiarity, adaptation, and internal process of development, the evolutionary dynamics of law and economics signifies a tendency towards corporate governance analysis that involves the study of institutional change and deals with questions that cannot be easily quantified. Such perspective invites a further look into the nature and evolution of legal norms and opens a way for a review of corporate governance arrangements from the perspective of unconventional socio-legal theories.Prispevek kritično ovrednoti obstoječe teoretične pristope ekonomske analize prava na področju upravljanja družb, s poudarkom na klasični ekonomski analizi prava, teoriji t. i. novega institucionalizma in literaturi s področja transplantacije pravnih norm ter z namenom opredeliti in nakazati njihove meje. Moderni pristopi, ki so v analizo pravnih pravil vpeljali nekatere nove koncepte, kot so dovzetnost, prilagodljivost in notranji proces razvoja, nakazujejo trend v smeri obravnavanja področja upravljanja družb s pomočjo elementov, ki se jih težje meri in kvantificira. Takšen pristop zahteva podrobno obravnavo narave in razvoja pravnih norm ter s tem odpira pot analizi korporacijskega upravljanja z vidika manj znanih teorij prava in sociologije

Managerial ownership and corporate performance in Slovenian post-privatisation period

The Slovenian post-privatisation period has been characterised by a decline in the ownership by non-managerial owners (employees) and state-controlled funds. On the other hand, domestic and foreign non-financial firms, Privatisation Investment Funds and managers have been increasing their holdings. The latter, namely the growing managerial ownership, is likely to feature in future ownership dynamics in Slovenia. In fact, in 2002 the desired (optimal) ownership stakes estimated by Slovenian managers were 10.8 percentage points higher than their actual stakes. The aim of our paper is to describe the main trends in the ownership of Slovenian corporations in the post-privatisation period and to provide an answer to the basic economic question: what is the influence of the ongoing consolidation of managerial ownership on the performance of Slovenian firms. The empirical analysis testing this relationship is based on a panel of 182 Slovenian firms in the 1995-99 period and does not provide relevant evidence of any positive effects of the increasing managerial control on Slovenian firms' performance. If any, a positive incentive effect is only observed in those firms whose managers' holdings exceed 10-percent, only with regards to firms' financial performance (but not total factor productivity) and only in firms that are not listed on the capital market. Further, the negative effect of the current gap between the desired and actual managerial ownership seems to exceed any positive incentive effect arising out of managerial ownership