The evolution of corporate governance and firm performance in transition economies: The case of Sellier and Bellot in the Czech Republic

  • Jandik T
  • Rennie C
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Abstract

This paper investigates the evolution of corporate governance and firm
performance in transition economies. It focuses on barriers that impeded
adoption of optimal corporate governance at Czech ammunition
manufacturer Sellier and Bellot (S&B) following voucher privatisation
in 1993. Exogenously imposed diffuse ownership, combined with legal,
capital market, and accounting deficiencies, contributed to poor
corporate governance and weak firm performance. This study shows how
legal, capital market, and accounting deficiencies hinder corporate
governance evolution; it demonstrates monitoring and incentive
mechanisms can create value in transition economies; it suggests
effective privatisation not only involves rapid ownership transfer but
careful accounting and securities regulation and legal protection.

Author-supplied keywords

  • Capital markets
  • Corporate governance
  • Corporation and securities law
  • Czech Republic
  • Ownership structure
  • Transition economies

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Authors

  • Tomas Jandik

  • Craig G. Rennie

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