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The relationship between ownership structure and corporate performance has been the subject of intense research in both transition and market economies. The Czech Republic's mass-privatization program provides an unique opportunity to investigate this relationship. It changed the ownership of firms in a short period of time, and firm characteristics had only a limited influence on the resulting ownership structure. For a cross section of 706 Czech firms over the period 1992 through 1997, we find that the more concentrated the ownership, the higher the firm profitability and labor productivity. These findings are weakly robust to the inclusion of control variables for the type of ownership, or to a correction for the endogeneity of ownership concentration.J. Comp. Econom., September 1999, 27(3), pp. 498–513. World Bank, 1818 H Street NW, Washington, DC 20433.