Competition, ownership and productivity. A panel analysis of Czech firms

Abstract

This study empirically investigates if competition's impact on firm performance depends on the ownership structure. Our results show that an increase in import competition has a positive effect on firms with concentrated ownership and a negative effect on firms with dispersed ownership, regardless of the level of domestic competition. Given that the optimal level of ownership concentration with respect to firm productivity is high (low) if tariffs are low (high) in the case when import competition is high these results are consistent with theoretical findings that competition has positive effects in companies that are a priori efficient but not in unproductive firms. If tariffs are high, however, they support inferences based on the x-inefficiency literature. Contrary to what has been suggested by some theoretical results, the riskiness of a firm's environment does not seem to influence our results. JEL: D24, F10

Reaching up and reaching out: The impact of competition on firms’ productivity and export decisions

“…Despite the increase in interest in this area, cross‐country analysis is particularly lacking. Due to data availability, the majority of studies have concentrated on the analysis of advanced economies and have typically conducted single‐country analysis (Amato & Amato, ; Baghdasaryan & La Cour, ; Buccirossi, Ciari, Duso, Spagnolo, & Vitale, ; Nickell, ; Nickell, Nicolitsas, & Dryden, ; Tang & Wang, ). As a result, studies on developing countries are scarce.…”

“…As a proxy for domestic competition, we use a concentration measure, the Herfindahl index, which is widely used in the published literature (Baghdasaryan & La Cour, ; Cherchye & Verriest, ; Valta, ; Xu, ). For foreign competition, although not explored as widely as domestic competition, a handful of the existing studies have used proxies such as import penetration, tariffs, the number of foreign competitors in the domestic market and subjective responses of respondents’ assessment of foreign competition (Baghdasaryan & La Cour, ; Gorodnichenko, Svejnar, & Terrell, ; Kostevc, ). However, measures such as import penetration and the number of foreign competitors in the domestic market do not capture foreign competition prevailing in the foreign market.…”

Informal Entrepreneurship in Developing Economies: The Impacts of Starting up Unregistered on firm Performance

“…Different types of ownership structure and legal status are also strongly correlated with firm performance, including whether a firm is state-owned or privately owned, foreign-or domestic-owned and an open-or closed-shareholding, partnership, or sole proprietorship (Barbera & Moores, 2013;Baghdasaryan & la Cour, 2013). Given that unregistered start ups may have different ownership structures and legal statuses than registered start ups, controlling for this is important.…”

Capital expenditure and persistence of firm performance: an empirical study for the Indian automobiles industry

“…These explanations primarily include impact of ownership structure, business-group affiliation, institutional voids, and corporate governance (Hoskisson et al, 2013;Jia et al, 2013;Karabag and Berggren, 2014;Jaisinghani, 2016). Many studies have argued that the interplay among a few or all of these factors determine firm performance for organisations belonging to emerging markets (Baghdasaryan and La-Cour, 2013;Kumar et al, 2015;Taussig and Delios, 2015). The major challenge confronting researchers studying these markets is that these factors are highly dynamic and vary widely across countries.…”