6 effective governance than the first. I therefore also use the share of equity held by all (four) strategic investors combined _(nonwide)._ The average share held by all strategic investors combined is 51 %, with a standard deviation of 23% (Table 2). The low is close to zero and the high of 93 %.

The mean equity share held by each of the four classes of strategic shareholders is 51 _%14_ or 13 percent, about equal to the mean of _H,_ 14%. As indicated, H will be equal to the mean equity share held by each class if the shares are equally distributed. On average, there is thus an equal distribution of share holdings among the four classes of strategic owners. But, the correlation between _nonwide_ and H is relatively low (0.41, Table 2), suggesting that they are separate indicators of ownership structure.

Prices I use three kind of prices: the prices of the last (5th) bidding round for both Czech and Slovak firms,9 and secondary market prices for _firms_ traded on the Prague Stock Exchange (PSE) and the Czech RM-system. The voucher prices cover 1469 finns; the number of _fums_ for which I have PSE and RM-system prices are much less as they involve only Czech republic firms. Since the PSE and RM-system are continuously operating markets (PSE traded once a week initially, now trades three times a week and is planning to trade five days a week; and the RM-system traded once a month initially, and now every two weeks), there are many prices which can be analyzed. I choose prices from November 30, 1993 for the PSE as on that date the largest number of shares (338) were traded.'<sup>0</sup> For the RM-system, I use the December 10th prices for altogether 714 stocks.

All prices are converted to their logarithms for two reasons. One, the voucher prices are not Czech Koruna (CK) prices, but rather shares per point. There is consequently a conversion from the voucher pnces into CK (RM and PSE) prices which is uniform across all stocks. Using logs allows for the calculation of correlations between voucher and secondary market prices and makes the regressions for voucher and secondary market prices comparable. Second, all three price series have a very fat-tailed distribution when expressed in levels. In logs the Using this index instead leads to results qualitatively similar to those reported below.

9Shafik (1994b) analyzes the price determination in the voucher rounds and uses what she calls fminal prices." These are the prices in the 5th round or the earlier prices of those stocks which had already been sold, with the modification that stocks which were oversubscribed in the 5th round and which were not yet sold for more than 50% are dropped (this implies that in total only 22 of the 1491 stocks offered in the voucher schemes are not included). I use this final price here too. I also used two other prices series: 5th round-prices and modified 5th round-prices, with the latter defined as the 5th round bidding prices excluding those 117 enterprises which were in excess demand in the 5th round, but including 255 enterprises already sold, mnaking for 1374 enterprises. The results are qualitatively similar to the ones for the fmal price reported here.

'<sup>0</sup> The PSE opened with trading on July 13, 1993; prior to October, trading was however limited to about 100 stocks. Since then the number of stocks traded on the PSE has increased.