Ownership Structure and Minority Expropriation in Non-Listed Firms: The Case for Multiple Large Shareholders
María Gutiérrez Urtiaga
Universidad Carlos III de Madrid-Departamento de Economía de la Empresa; European Corporate Governance Institute (ECGI)
Josep A. Tribo
Universidad Carlos III de Madrid
ECGI - Finance Working Paper No. 053/2004
This paper investigates minority expropriation problems in closely-held corporations, where control is shared by a small number of blockholders. Using a large sample of Spanish firms for the years 1996 through 2000, we find that firms whose characteristics make them more vulnerable to minority expropriation tend to have controlling groups with stakes that are far removed from the 50% threshold, where expropriation is higher. However, because of adjustment costs, firms do not achieve an optimal ownership structure. Performance improves when the controlling group's ownership stake is higher and, for a given ownership stake, when the number of group members increases.
Number of Pages in PDF File: 49
Keywords: Corporate ownership, multiple large shareholders, corporate performance, private benefits, minority expropriation
JEL Classification: G32working papers series
Date posted: March 18, 2008
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