Do Differences in Legal Protections Explain Differences in Ownership Concentration?
Clifford G. Holderness
Boston College - Department of Finance
March 10, 2008
Abstract:
Existing research on cross-country differences in ownership concentration analyzes country averages of ownership concentration instead of firm-level data. This creates omitted-variable and aggregation biases. Most papers also use small samples of large firms. This makes inferences to country populations problematic because ownership concentration is inversely related to firm size and firm size varies across countries. When I analyze firm-level observations; control for firm-level determinants of ownership concentration, including size; and use a broad sample of firms from 32 countries, there is no support for the widely held theory that large shareholders are a response to weak legal protections for investors.
Keywords: Ownership Concentration, Legal Origins, Investor Protections
JEL Classifications: G15, G32, G34
Working Paper Series
Suggested Citation
Holderness, Clifford G., Do Differences in Legal Protections Explain Differences in Ownership Concentration? (March 10, 2008). Available at SSRN: http://ssrn.com/abstract=1104678
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