The Impact Of Private Ownership On Corporate Governance Practices In Mongolian Firms: An Empirical Perspective
This paper investigates the impact private ownership has had on corporate governance practices in Mongolian firms.
Prior to its transition to free market economy, much of the firms in Mongolia were state-owned and state controlled with the
attendant consequences of widespread inefficiencies in diverse respects. This contrasts with the reality and accepted norm that
strict adherence to the basic principles of good corporate governance is essential for economic growth and development. Little
wonder, Mongolian government has in the past fifteen years, made giant strides in promoting private ownership, taking several
measures to establish and strengthen governance structures. The expectation locally and internationally is that firms in
post-socialist Mongolia will be more closely aligned to generally accepted governance mechanisms. In achieving the
objectives of this study, a sample of seventy randomly selected listed firms, representing 22% of Mongolian Stock Exchange
listings, were surveyed. We find that corporate governance practices tend to be better in privately held than in state-invested
firms and that corporate governance practices among Mongolian firms has remarkably improved post free market transition.
This result has important policy implications.
Key words- Corporate governance, Mongolia, Private ownership, free market.