Does Ownership Matter? Empirical Evidence from the German Wine Industry

30 Pages Posted: 27 Sep 2004

See all articles by Bernd Frick

Bernd Frick

University of Witten/Herdecke - Institute of Economics and Business Administration

Abstract

There is widespread belief among economists that the separation of ownership and control tends to reduce the performance of companies while competition tends to improve it. Irrespective of their theoretical appeal these assumptions have not been tested very often. Using an unbalanced panel of about 300 German wineries (compiled from four different editions of a highly respected and widely used wine guide), the paper shows that firms run by 'managing directors' produce higher quality and more expensive wines than otherwise identical owner-managed firms. Since firms have identical production functions and due to the intense competition in the sector under consideration it is very likely that differences in human capital explain the observed productivity differences.

Suggested Citation

Frick, Bernd, Does Ownership Matter? Empirical Evidence from the German Wine Industry. Available at SSRN: https://ssrn.com/abstract=591555

Bernd Frick (Contact Author)

University of Witten/Herdecke - Institute of Economics and Business Administration ( email )

D-58448 Witten
Germany

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