State Intervention as an Antecedent of Ownership Structure in Turkish Joint-Stock Companies

Abstract

Dispersed ownership is not the rule except for the US and UK. Instead, companies are concentrated in the hand of families in the rest of the world. It is stated that the quality of transparency is directly associated with the ownership structures. Thus, it is not possible to comprehend transparency practise followed by firms without understanding how their capital structure and dynamics of this structure affect their management. Previous studies have found that Turkish joint-stock companies have highly concentrated and centralized family based ownership structure but the foundations of having this ownership structure are rarely taken into consideration. This is particularly important in setting the standards for transparency. This study attempts to trace back the ownership structure of Turkish companies to explain why families are the dominant shareholders in this structure. The results show that heavy government intervention in business activities affects the complexity of organizational structures and the transparency practices of companies.