DOES CORPORATE OWNERSHIP STRUCTURE MATTER FORECONOMIC GROWTH? A CROSS-COUNTRY ANALYSIS
Panayotis Kapopoulos
Emporiki Bank, Division of Economic Analysis and Research
Sophia Lazaretou
Bank of Greece, Economic Research Department
ABSTRACT
The role of corporations in allocating resources has been of great importance in thedebate about the manner in which enterprises should be governed to enhanceeconomic growth. Corporate governance features seem to be central to the dynamicsby which successful firms and economies improve their performance over time aswell as relative to each other. In this paper we try to clarify the relationship betweencorporate ownership structure and output growth by using the data of La Porta et al.(1999) on ownership structure of large- and medium-sized corporations in 27 wealthyeconomies. To search for empirical linkages, we use cross-country growthregressions. The evidence provided in the paper suggests that an environment with ahigher percentage of directly and indirectly widely-held companies and a lowerdegree of state than private ownership is associated with a higher growth rate of percapita income. We also conclude that a higher degree of institutional investment doesnot seem to enhance the growth performance of an economy.
Keywords: corporate ownership structure, cross section growth model
JEL classification: G320, P430, P480, 0160
We would like to thank Heather Gibson and George Tavlas whose detailedcomments and suggestions led to substantial improvements in the paper. Needless to say, the viewsexpressed here are those of the authors and do not necessarily represent those of the Emporiki Bankand the Bank of Greece, while any remaining errors are solely the authors’ responsibility.
Sophia Lazaretou,
Economic Research Department
Bank of Greece, 21 El. Venizelou Ave.,
102 50 Athens, Greece
Tel. +30210-320.2992, Fax +30210-323.3025
Email: slazaretou@bankofgreece.gr