12 significant (not reported). Effective control by the _state--controls,_ a dummy which takes on the value one if the state share as a fraction of _nonwide_ is larger than 50%--has, however, almost always a negative effect on prices. Whether or not I control for domestic or foreign strategic ownership, the coefficient for _controls_ is most often negative, and significantly so, and if positive, rarely significant (not reported). These two results suggests that having the state as another owner can be useful, perhaps as it allows for some beneficial treatment of the firm (e.g., favorable credits),<sup>19</sup> but that having the state control the firm is perceived to have a negative effect on the value of the fimn.

I investigate the effect of ownership by investment funds on prices by including in the regression the total equity stake of all funds, _ipfs,_ for the particular firm. This way I also investigate whether investment funds perhaps collude, which would imply that not just the equity shares of the top investment funds are positively related to the share prices:O0 I find that the coefficient for the equity share of all investment funds combined is significantly positive (Table 6, where only the results without _nonwide_ are reported). This effect is difficult to separate, however, from the influence of large strategic ownership in general as there is a relatively high correlation between _nonwide_ and _ipfs, 0.59._ There is a clear tradeoff, however, between _nonwide_ and H on the one hand and effective control, particular by investment funds, on the other hand. As reported, the lower _nonwide,_ the easier it is for a given strategic investor--particularly investment funds-to have a controlling stake (as it takes a lower share of equity). I show this by using the dummy _relctrl,_ which is one for those firms where there is ay investor (whether the state, domestic, foreign or one or two investment funds) which has effective control (defined as a fraction of _nonwide_ larger than 50%). This dummy has a negative correlation with the share of _nonwide,_ -0.42. I now use the dummy _relctrl_ to see whether a controlling stake in itself leads to higher share prices. Table 7 shows that, even when I control for _nonwide and_ H, the coefficient for _reictrl_ is negative, and significant in almost all cases (when controlling for _nonwide_ alone, the coefficient is not significant for PSE and RM prices, but still significant for the voucher prices). It appears that this result largely arises because the investment finds can establish more easily control when _nonwide_ is small. A _controli_ dummy-indicating control by the top 2 investment funds alone-has then also a correlation of -0.61 with _nonwide._ Using _controli_ instead of _relctrl,_ I find that _coniroli_ explains most of the negative influence on prices of controlling ownership (not reported).

These results suggest that high absolute strategic ownership has a positive effect on prices, but that effective control, particularly by investment fimds, does not have a positive influence on prices--actually a negative influence. This tradeoff could arise on three accounts: 9'The fact that for the more recent PSE and RM prices, the coefficient for the share of state ownership is no longer significant may reflect a revision of this view, at least for the Czech Republic.

"I also used the total equity shares held by the top one through top 'n" investment fimd. The results are very similar to using _ipfs,_ as these equity shares are highly correlated with _ipfs._