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Complex Ownership Structures and Corporate Valuations

Author/Editor: Laeven, Luc | Levine, Ross
Authorized for Distribution: June 1, 2007
Electronic Access: Free Full Text (PDF file size is 386KB)
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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.
 
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Series: Working Paper No. 07/140
Subject(s): Corporate governance
Author's keyword(s): Corporate governance | large shareholders | blockholders
 
English  
    Published:   June 1, 2007        
    ISBN/ISSN:   1934-7073   Format:   Paper
    Stock No:   WPIEA2007140   Pages:   37
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
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