Oskar Kowalewski

Influence of Family Involvement in Management and Ownership on Firm Performance: Evidence From Poland

This article investigates the influence of family involvement on firm performance in an emerging market economy. Using a panel of 217 Polish companies from 1997 to 2005, the authors find an inverted U-shaped relationship between the share of family ownership and firm performance. The data also reveal that firms with family CEOs are likely to outperform their counterparts that have nonfamily CEOs. The results take into account the endogeneity of family ownership and are robust to a number of specification checks.

Corporate Governance and Dividend Policy in Poland

The goal of this paper is twofold. First, we explore the determinants of the dividend policy in Poland. Second, we test whether corporate governance practices determine the dividend policy in the non-financial companies listed on Warsaw Stock Exchange. We compose, for the first time, quantitative measures on the quality of the corporate governance for 110 non-financial listed companies. Our results suggest that large and more profitable companies have a higher dividend payout ratio. Furthermore, riskier and more indebted firms prefer to pay lower dividends. The findings finally, based on the period 1998-2004, demonstrate that an increase in the TDI or its subindices that represent corporate governance practices brings about a statistically significant increase in the dividend-to-cash-flow ratio. Moreover, the estimates prove to be significant after the inclusion of standard additional controls.

The Financial System of the EU 25

We present an overview of the financial structure of the enlarged European Union with 25 countries. We start by describing the financial system development in all member states since 1995, and then compare the structure between the old and new countries. Using financial measures we document the prevailing substantial differences in the financial structure between new and old member states after the enlargement in 2004. Finally, we compare the financial structures of an enlarged EU with those of the United States and Japan.

Transmission of Bank Liquidity Shocks in Loan and Deposit Markets: The Role of Interbank Borrowing and Market Monitoring

We examine the international transmission of bank liquidity shocks from multinational bankholding companies to their subsidiaries. Our findings are consistent with the studies that document that parent bank fragility negatively affects lending by subsidiaries. We further find that reduction in foreign bank lending is stronger for those that are dependent on the interbank market. Moreover, foreign bank lending is determined by different factors in emerging markets and in developed countries. Finally, we show that liquidity needs determine the change in deposits in developing economies, especially during the recent crisis whereas market discipline is relatively more dominant in developed countries.

Financial Crisis, Structure and Reform

In this paper, we examine the empirical link between the structural characteristics of the financial system and financial crisis. We find that there is a significant short-term reversal in development of the banking sector and stock market during both bank crises and market crashes, with the bond market moving the same direction as bank credit. The result, however, is significant for market-based countries but not significant for bank-based countries. As emerging markets are mainly bank-based it may provide an explanation why it takes more time for them to recover from economic downturn after a crisis. As the financial reform did not make much contribution to alleviate the crises, we argue that it needs to concentrate on a more diversified financial system.

The effects of foreign and government ownership on bank lending behavior during a crisis in Central and Eastern Europe

We examine whether foreign-owned and government-owned banks in Central and Eastern Europe reacted differently during a domestic systematic banking crisis and the global financial crisis of 2008. Our panel dataset comprises data on more than 400 banks for the period 1994- 2010. Our analysis shows that foreign banks provided credit during domestic banking crises in host countries, while government-owned banks contracted. In contrast, foreign-owned banks reduced their credit base during the global financial crisis, while government-owned banks expanded. Consequently, our results show that foreign-owned banks may contribute to financial stability during domestic crisis episodes, but also increase the risk of importing instability from abroad during a crisis in their home markets. However, government-owned banks may substitute for foreign-owned banks and hinder the transmission of international shocks. Thus, our results indicate that a mixed banking sector consisting of foreign-owned and government-owned banks is most advisable.

Does corporate governance determine dividend payouts in Poland

This study examines the relation between corporate governance practices measured by the Transparency Disclosure Index (TDI) and dividend payouts in Poland. Our empirical approach lies in constructing measures of the quality of the corporate governance in 110 non-financial companies listed on the Warsaw Stock Exchange between 1998 and 2004.We find evidence that an increase in the TDI or its sub-indices leads to an increase in the dividend to cash flow ratio. These results support the hypothesis that companies with weak shareholder rights pay dividends less generously than do firms with high corporate governance standards. We assume that well protected shareholders in Poland use their power to extract dividends, thus our results seem to support the outcome agency model of dividends.

Does Corporate Governance Determine Corporate Performance and Dividends During Financial Crisis: Evidence from Poland

This study seeks to investigate the relationship between corporate governance, measured by Corporate Governance Index (CGI), and firms performance and dividend payouts during the financial crisis in Poland. The empirical approach in the study lies in constructing a comprehensive measure of the corporate governance for 298 non-financial companies listed on Warsaw Stock Exchange in the years 2006-2010. The results show a positive association between corporate governance and performance measured by Tobins q. Moreover, I find evidence that higher corporate governance leads to an increase in cash dividends. Finally, the results presents that during the recent financial crisis corporate governance is positively associated with return on assets. However, in the period of the financial crisis better governed companies paid dividends less generously than do firms with lower corporate governance standards.

Bank Ownership Structure, SME Lending and Local Credit Markets

In this paper, by employing a novel approach, we study the relationship between bank type and small-business lending in a post-transition country. Using a unique dataset on bank branches and firm-level data, we find that local cooperative banks lend more to small businesses than do large domestic banks and foreign-owned banks, even when controlling for the financial situation of the cooperative banks. Additionally, our results suggest that cooperative banks provide loans to small businesses at lower costs than foreign-owned banks or large domestic banks. Finally, we show that small and medium-sized firms perform better in counties with a large number of cooperative banks than in counties dominated by foreign-owned banks or large domestic banks. Our results are important from a policy perspective, as they show that foreign bank entry and industry consolidation may raise valid concerns for small firms in developing countries.

Why Do Companies Go Private in Emerging Markets? Evidence from Poland*

distinguish the difference between firms that went private and those that did not. We found that the probability of going private grew with an increase in the concentration of foreign ownership, a rise in the relative level of free cash flows, a decrease in the level of long term debt, and a decrease in the liquidity of share trading. The results obtained are important both for investors wishing to identify entities marked by a high likelihood of going private as well as for governmental authorities evaluating the methods and rationality of privatization among mature state-owned enterprises. In den letzten Jahren hat sich die Zahl der privaten Transaktionen in wachsenden Markten enorm vervielfacht. Der Zweck dieser Studie ist es, die finanziellen Charakteristika von Firmen, die privatisiert worden sind, zu definieren anhand eines Datensatzes von polnischen Unternehmen. Wir fanden heraus, dass die Wahrscheinlichkeit einer Privatisierung hoher ist im Zusammenhang mit auslandischen Inhabern, einer relativen Erhohung des Kapitalflusses, einer Erhohung der langfristigen Schulden und einer Verringerung der Liquiditat von Aktien. Die Ergebnisse sind wichtig fur Investoren und auch fur Behorden zur Evaluierung von Methoden und der Rationalitat der Privatisierung unter fortgeschrittenen staatlichen Unternehmen.