engleski

Post-Acquisition Performance of Croatian Companies Acquired by Foreign Owners

The issue on whether foreign owners bring prosperity to individual firms and to society is highly debated in Croatia. The question arises especially at times when there is a sell-out of a larger Croatian company to a foreign business group. We have studied the influence of ownership structures on the financial performance of Croatian companies by comparing firms with a majority share of foreign ownership, with companies that are still dominantly owned by the government privatization fund. We have also examined companies privatized through ESOP programs as a third referential group. The study stems from the hypothesis that ownership structures affect governance and this can lead to better corporate performance providing owners have the authority to act and possess pertinent information and adequate incentives. We have examined a sample of 63 firms and discussed the possible reasons as to why might firms acquired by foreigners, especially company groups, perform better. Our study indicates that foreign owners achieve better financial performance than other ownership structures. However, based on our research alone, we cannot argue that better performance is solely the result of better governance.

corporate governance, ownership structures, post acquisition performance, Croatia

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