Private Benefits of Control, Growth Opportunities and Investor Protection
نویسندگان
چکیده
منابع مشابه
Private Benefits of Control, Growth Opportunities and Investor Protection*
We develop a model to illustrate that controlling shareholders choose the level of investor protection that maximizes their own interests. Controlling shareholders in companies with complicated control structures can easily extract private benefits and are thus reluctant to enhance investor protection which would necessitate increased transparency. In contrast, controlling shareholders in compa...
متن کاملPrivate Benefits of Control, Capital Structure and Company Growth
This paper studies the influence of the private benefits of control on the capital structure and the growth of private companies. It is argued that companies in which existing owners would lose more control if they expanded, issue less new equity, use more debt and grow more slowly. The dataset covers 6834 private UK companies with limited liability for up to 5 years. Loss of control is measure...
متن کاملInvestor Protection and Asset Pricing∗
Corporations in most countries are run by controlling shareholders, who have substantially smaller cash flow rights than their control rights in the firm. This separation of ownership and control allows the controlling shareholders to pursue private benefits at the cost of outside minority investors by diverting resources away from the firm and distorting corporate investment and payout policie...
متن کاملThe Effect of Investor Protection
This paper tests the hypotheses that poor investor-protection environments lead to higher information asymmetry in security markets. We compare China-based stocks, which operate in a relatively unprotected environment, to Hong Kong-based stocks. The information component in the market friction of China stocks is shown to be up to 20% larger than that of Hong Kong-based stocks. The effect is rob...
متن کاملPrivate Benefits of Control: An International Comparison
We construct a measure of the private benefits of control in 39 countries based on 393 control transactions between 1990 and 2000. We find that the value of control ranges between –4% and +65%, with an average of 14 percent. As predicted by theory, in countries where private benefits of control are larger capital markets are less developed, ownership is more concentrated, and privatizations are...
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ژورنال
عنوان ژورنال: China Journal of Accounting Research
سال: 2009
ISSN: 1755-3091
DOI: 10.1016/s1755-3091(13)60011-8