Corporate efficiency in Europe

Jan Hanousek, Evzen Kocenda, Anastasiya Shamshur

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42 Citations (Scopus)
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Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm’s equity. In the analysis, we distinguish between a pre-crisis period (2001–2008) and a post-crisis period (2009-2011), and find that our results are sensitive to the period of observation.
Original languageEnglish
Pages (from-to)24–40
Number of pages17
JournalJournal of Corporate Finance
Issue number3
Early online date3 Apr 2015
Publication statusPublished - Jun 2015


  • efficiency
  • ownership structure
  • stochastic frontier
  • Europe
  • firms
  • Panel data

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