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OWNERSHIP STRUCTURES AND CAPITAL ALLOCATION: EVIDENCE FROM ESTIMATING PRODUCTION FUNCTIONS UNDER ALTERNATIVE SPECIFICATIONS
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Bersant Hobdari 
Abstract
New and rich panel data for a large and representative sample of firms are used to estimate the effect of ownership structures on capital allocation. This issue is examined in a production function framework under alternative specifications. Our estimates confirm differences in capital allocation across firm under different ownership structure. Furthermore, we find that: (i) most of Estonian firms operate at the wrong point on their production function (ii) insider owned firms suffer from under-investment, (iii) state and domestic outsider owned firms display over-investment (iv) there is evidence of widespread managerial discretion.
Keywords: Corporate Investment, Insider Ownership, Production Functions, Generalized Method of Moments
How to cite this paper: Hobdari, B. (2008). Ownership structures and capital allocation: evidence from estimating production functions under alternative specifications. Corporate Ownership & Control, 5(2), 100-109. https://doi.org/10.22495/cocv5i2p8
