Publication Date



Upjohn Institute Working Paper No. 03-93

**Published Version**

In Corporate Governance 13(2): 254-264




We examine the impact of ownership concentration on firm performance using panel data for firms listed on the Budapest Stock Exchange, where ownership tends to be highly concentrated and frequently involves multiple blocks. Fixed-effects estimates imply that the size of the largest block increases profitability and efficiency strongly and monotonically, but the effects of total blockholdings are much smaller and statistically insignificant. Controlling for the size of the largest block, point estimates of the marginal effects of additional blocks are negative. The results suggest that the marginal costs of concentration may outweigh the benefits when the increased concentration involves "too many cooks."

Issue Date

Revised February 2004


Research was supported by a CEU Faculty Research Grant. Earlier data collection was funded by the European Union's Phare ACE Program 1998; collaboration was facilitated by travel support from a USAID Think Tank Partnership Grant.

Subject Areas

INTERNATIONAL ISSUES; International labor comparisons; Transition economies


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Earle, John S., Csaba Kucsera, and Álmos Telegdy. 2004. "Ownership Concentration and Corporate Performance on the Budapest Stock Exchange: Do Too Many Cooks Spoil the Goulash?" Upjohn Institute Working Paper No. 03-93. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.