Complex Ownership Structures and Corporate Valuations
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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.
Series:
Working Paper No. 2007/140
Subject:
Business enterprises Capital spending Corporate governance Market capitalization Tax incentives
English
Publication Date:
June 1, 2007
ISBN/ISSN:
9781451867046/1018-5941
Stock No:
WPIEA2007140
Pages:
37
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