Minority Control: An Analysis of British Companies using Voting Power Indices
نویسنده
چکیده
Most of the theoretical work on methods of calculating power indices used in this paper was done during sabbatical leave in 1996/7 and completed during 1997/8 when reliable computer algorithms were devised and implemented. A very preliminary version covering some of the methodological issues were presented to research seminars in the Economics department and the Business School at Warwick in the Autumn Term 1997. I would like to thank the participants for their comments. Abstract An exercise in the empirical use of voting power indices from cooperative game theory applied to ownership data for large companies, this paper contributes in two areas: (1) the analysis of company control based on shareholder voting power, and (2) the empirical use of power indices and understanding of the comparative properties of different indices. New algorithms for calculating power indices, which quantify voting power in weighted voting bodies like company meetings, are applied to detailed data on beneficial ownership of 444 large UK companies without majority control. The results show that the Banzhaf index is, and the Shapley-Shubik index is not, useful for this analysis and a control classification of the firms is obtained.
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