Complex Ownership Structures and Corporate Valuations
June 1, 2007
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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.
Subject: Business enterprises, Capital spending, Corporate governance, Market capitalization, Tax incentives
Keywords: cash-flow dispersion, cash-flow right, firm c, founding firm, ownership structure, WP
Pages:
37
Volume:
2007
DOI:
Issue:
140
Series:
Working Paper No. 2007/140
Stock No:
WPIEA2007140
ISBN:
9781451867046
ISSN:
1018-5941
