engleski

Corporate Governance and ownership concentration in Croatia

The developments in the Croatian corporate sector in last fifteen years showed that the institutional framework during the 1990s was very poor and in combination with unorthodox method of privatization resulted in the emergence of severe social and economical problems. However, certain improvements in the area of corporate governance have taken place in recent years. Ownership concentration has crucial policy implication with respect to corporate governance. It defines distribution of control between managers and shareholders. Large number of small shareholders increases separation of ownership and control. While in American business practice ownership structure is extremely dispersed, in rest of the world ownership is concentrated within large shareholders. Concentration of ownership in the hands of few or even one big shareholder ensures level of control that allows direct control of management actions, however it brings forth another agency problem – one between dominant and minority shareholders. This paper explores level of ownership concentration in Croatian listed companies. Using the dataset on shareholders of Croatian public companies we study the degree of ownership concentration and its determinants and consequences for the corporate governance in Croatia.

governance; ownership concentration; shareholders; Croatia

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