Financial Performance of Czech Privately-Held Firms with Multiple Owners
Financial Performance of Czech Privately-Held Firms with Multiple Owners

Author(s): Ondřej Machek, Aleš Kubíček
Subject(s): Business Economy / Management, Micro-Economics
Published by: Masarykova univerzita nakladatelství
Keywords: multiple owners; performance; privately-held firms; Czech Republic;
Summary/Abstract: Privately-held firms represent the vast majority of firms worldwide. When owned by multiple shareholders, the owners become a social group who interact with each other, which affects the behavior of the firm and its financial performance. The goal of this paper is to explore the financial characteristics of Czech privately-held firms with multiple owners. Using a sample of 28,972 Czech limited liability firms, and after controlling for firm size, age, and industry affiliation, we found that the presence of multiple owners has a negative effect on asset turnover. However, the number of shareholders as such seems to have no effect on profitability, debt use, and liquidity. Instead, sole proprietorships seem to be empirically different from firms with two or more owners, as they have a significantly greater liquidity.

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