Large Listed Firms in Europe : Impact of legal tradition and ownership structure onperformance

This paper investigates the impact of legal tradition and ownership on investment performance in large European listed firms. Europe is of special interest in this sense since the legal systems differs widely. Anglo Saxon, Scandinavian, German as well as French variants of legal systems can be found in representative forms in a concentrated geographical area. It is also interesting as the dispersed ownership pattern discussed and theoretized in much of the corporate governance literature is only common in Anglo Saxon countries. Most countries show a rather concentrated ownership of listed firms. This study differs from earlier studies by concentrating on large listed firms. These are firms in which shareholder protection should be most important for handling typical corporate governance problems. The results show in line with the expectations that performance is lower in these large firms. Somewhat unexpectedly the results also indicate that the Anglo Saxon legal system is no guarantee for good governance and importance. A possible explanation is that shareholder protection changes over time in a fashion that does not always follows legal origin demarcations