[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cer/papers/wp335.html
   My bibliography  Save this paper

Can the Market Fix a Wrong Administrative Decision? Massive Delisting on the Prague Stock Exchange

Author

Listed:
  • Zuzana Fungacova
Abstract
This research contributes to the investigation of the emerging stock markets in transition economies, namely in the Czech Republic. We estimate the impact of the various determinants of shares delisting e.g. exclusion from public trading on the Prague Stock Exchange (PSE) during the period 1993 – 2004. Unlike its counterparts in Poland or Hungary, exceptionally large amounts of shares were delisted from the PSE. Using the data on listed and delisted companies we show that the pre-privatization and privatization characteristics of the companies were decisive for delisting. This further indicates that it would have been possible to prevent massive delisting if these factors had been taken into account when deciding which companies to place on the stock exchange for public trading. Moreover, therefore companies that were not suitable for public trading were also not suitable for voucher privatization.

Suggested Citation

  • Zuzana Fungacova, 2007. "Can the Market Fix a Wrong Administrative Decision? Massive Delisting on the Prague Stock Exchange," CERGE-EI Working Papers wp335, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp335
    as

    Download full text from publisher

    File URL: http://www.cerge-ei.cz/pdf/wp/Wp335.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. World Bank, 2002. "Transition, The First Ten Years : Analysis and Lessons for Eastern Europe and the Former Soviet Union," World Bank Publications - Books, The World Bank Group, number 14042.
    2. Joshua D. Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 69-85, Fall.
    3. Simon Johnson, 2000. "Tunneling," American Economic Review, American Economic Association, vol. 90(2), pages 22-27, May.
    4. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    5. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-558, June.
    6. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    7. Anete Pajuste, 2002. "Corporate governance and stock market performance in Central and Eastern Europe: a study of nine countries, 1994-2001," UCL SSEES Economics and Business working paper series 22, UCL School of Slavonic and East European Studies (SSEES).
    8. Jan Bena & Jan Hanousek, 2008. "Rent Extraction by Large Shareholders: Evidence Using Dividend Policy in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(03-04), pages 106-130, May.
    9. Jan Hanousek & Randall K. Filer, 2000. "The Relationship Between Economic Factors and Equity Markets in Central Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(3), pages 623-638, November.
    10. Megginson, William Leon, 2005. "The Financial Economics of Privatization," OUP Catalogue, Oxford University Press, number 9780195150629.
    11. Hanousek, Jan & Podpiera, Richard, 2004. "Czech experience with market maker trading system," Economic Systems, Elsevier, vol. 28(2), pages 177-191, June.
    12. Nandini Gupta & John Ham & Jan Svejnar, 2000. "Priorities and Sequencing in Privatization: Theory and Evidence from the Czech Republic," Econometric Society World Congress 2000 Contributed Papers 1580, Econometric Society.
    13. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    14. Joshua Angrist & Alan Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Working Papers 834, Princeton University, Department of Economics, Industrial Relations Section..
    15. Vladimir Atanasov & Conrad S. Ciccotello & Stanley B. Gyoshev, 2005. "How Does Law Affect Finance? An Empirical Examination of Tunneling in an Emerging Market," William Davidson Institute Working Papers Series wp742, William Davidson Institute at the University of Michigan.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zuzana Fungacova, 2005. "Building a Castle on Sand: Effects of Mass Privatization on Capital Market Creation in Transition Economies," CERGE-EI Working Papers wp256, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Jan Bena & Jan Hanousek, 2008. "Rent Extraction by Large Shareholders: Evidence Using Dividend Policy in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(03-04), pages 106-130, May.
    3. Thorsten Beck & Ross Levine, 2008. "Legal Institutions and Financial Development," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 11, pages 251-278, Springer.
    4. Majumdar, Sumit K., 2016. "Debt and communications technology diffusion: Retrospective evidence," Research Policy, Elsevier, vol. 45(2), pages 458-474.
    5. James R. Brown & J Anthony Cookson & Rawley Heimer, 2014. "Legal Institutions, Credit Markets, and Economic Activity," Working Papers (Old Series) 1434, Federal Reserve Bank of Cleveland.
    6. Mallik, Girijasankar & Nguyen, Duc Nguyen & Chowdhury, Anis, 2022. "Does firm size really affect the outcome of loan applications?," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 806-820.
    7. Samargandi, Nahla & Fidrmuc, Jan & Ghosh, Sugata, 2015. "Is the Relationship Between Financial Development and Economic Growth Monotonic? Evidence from a Sample of Middle-Income Countries," World Development, Elsevier, vol. 68(C), pages 66-81.
    8. Wu, Fang & Cao, June & Zhang, Xiaosan, 2023. "Do non-executive employees matter in curbing corporate financial fraud?," Journal of Business Research, Elsevier, vol. 163(C).
    9. Demirgüç-Kunt, Asli & Horváth, Bálint L. & Huizinga, Harry, 2017. "How does long-term finance affect economic volatility?," Journal of Financial Stability, Elsevier, vol. 33(C), pages 41-59.
    10. Ana Lilia Hernández Pineda & Alí Aali-Bujari, 2022. "¿Impulsan la actividad económica en América Latina el número de sucursales bancarias y cajeros automáticos?," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 17(1), pages 1-13, Enero - M.
    11. Asli Demirgüç-Kunt & Ross Levine, 2009. "Finance and Inequality: Theory and Evidence," Annual Review of Financial Economics, Annual Reviews, vol. 1(1), pages 287-318, November.
    12. Chung-Hua Shen & Chien-Chiang Lee & Shyh-Wei Chen & Zixiong Xie, 2011. "Roles played by financial development in economic growth: application of the flexible regression model," Empirical Economics, Springer, vol. 41(1), pages 103-125, August.
    13. Robert Stewart & Murshed Chowdhury & Vaalmikki Arjoon, 2021. "Bank stability and economic growth: trade-offs or opportunities?," Empirical Economics, Springer, vol. 61(2), pages 827-853, August.
    14. Pawe³ Boles³aw Bojar, 2019. "The link between economic growth and financial development in the Europe," Faculty of Management Working Paper Series 12019, University of Warsaw, Faculty of Management.
    15. Tuna, Gulcay & Almahadin, Hamed Ahmad, 2021. "Does interest rate and its volatility affect banking sector development? Empirical evidence from emerging market economies," Research in International Business and Finance, Elsevier, vol. 58(C).
    16. Xiaoqiang Cheng & Hans Degryse, 2010. "The Impact of Bank and Non-Bank Financial Institutions on Local Economic Growth in China," Journal of Financial Services Research, Springer;Western Finance Association, vol. 37(2), pages 179-199, June.
    17. Huang, Qianqian & Jiang, Feng & Lie, Erik & Yang, Ke, 2014. "The role of investment banker directors in M&A," Journal of Financial Economics, Elsevier, vol. 112(2), pages 269-286.
    18. Smaoui, Houcem & Nechi, Salem, 2017. "Does sukuk market development spur economic growth?," Research in International Business and Finance, Elsevier, vol. 41(C), pages 136-147.
    19. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    20. Almeida, Heitor & Campello, Murillo & Weisbach, Michael S., 2011. "Corporate financial and investment policies when future financing is not frictionless," Journal of Corporate Finance, Elsevier, vol. 17(3), pages 675-693, June.

    More about this item

    Keywords

    Mass privatization; stock market; delisting; transition economy.;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cer:papers:wp335. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lucie Vasiljevova (email available below). General contact details of provider: https://edirc.repec.org/data/eiacacz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.