The development of equity capital markets in transition economies

Více o knize

This book explores two interrelated issues that may impede the development of equity capital markets: partial privatisation and shareholder rights, focusing on transition economies, particularly Russia. Chapter 2 presents a theory of partial privatisation, explaining why the state retains some residual shares. Recent surveys indicate that the state often does not actively exercise the voting rights associated with these shares, which could entrench management and hinder restructuring efforts. This situation may also limit the supply of shares, resulting in low liquidity and slowing the equity capital market's development. However, the model suggests that retaining shares can be a rational strategy to maximize privatisation receipts. Chapter 3 examines the challenges posed by weak institutions that prevent the state from guaranteeing shareholder rights. It empirically investigates which firms respect these rights and connects this issue to partial privatisation. Interestingly, the findings reveal weak evidence that state residual holdings do not negatively impact the introduction of shareholder rights and may even serve as a slight positive influence.