Complex Ownership Structures and Corporate Valuations

Author/Editor:

Luc Laeven ; Ross Levine

Publication Date:

June 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The bulk of corporate governance theory examines the agency problems that arise from two extreme ownership structures: 100 percent small shareholders or one large, controlling owner combined with small shareholders. In this paper, we question the empirical validity of this dichotomy. In fact, one-third of publicly listed firms in Europe have multiple large owners, and the market value of firms with multiple blockholders differs from firms with a single large owner and from widely-held firms. Moreover, the relationship between corporate valuations and the distribution of cash-flow rights across multiple large owners is consistent with the predictions of recent theoretical models.

Series:

Working Paper No. 07/140

Subject:

English

Publication Date:

June 1, 2007

ISBN/ISSN:

9781451867046/1018-5941

Stock No:

WPIEA2007140

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

37

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