Ownership Structure in Greece: Determinants and Implications on Corporate Governance

Abstract

The paper analyzes ownership structure in Greece. Greece has the same characteristics as Spain, Italy, Portugal, and other countries that are ranked in the Continental Europe corporate governance system. Two measures of ownership concentration are used. The first is the sum of equity holdings of the five biggest shareholders, while the second is square of the first (Herfindahl Index). Determination of the factors that affect ownership structure is done using Panel Data Regression models. Stratifying variables, like law (before and after the enactment of the corporate governance law), sector (finan 144 cial or not), and index ranking were used. Two main hypotheses were tested: a) ownership structure is affected by quality of corporate governance and its mechanisms, financial performance, board of directors‘ structure and composition and finally firm‘s size, b) the factors that affect ownership concentration in a country like Greece are the same with the ones that literature specifies for the Anglo-Saxon countries. Overall, ownership concentration in Greece has different characteristics than the ownership structure in the Anglo-Saxon countries and creates a very different internal and external environment. Ownership structure is affected by the historical development of the firm, its organizational scheme and even more by the balance of power and control within the firm. Corporate governance quality and mechanisms as well as external factors, like the law, index ranking, and existence of an external market for corporate control do not seem to have any significant effect on ownership structure.