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The Separation of Ownership and Control: An Analysis of Ultimate Ownership in Western European Corporations

Mara Faccio
Purdue University - Krannert School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Larry H.P. Lang
Chinese University of Hong Kong (CUHK) - Department of Finance

February 2000

EFA 0136

Abstract:
We analyze the ultimate ownership and control of 3,740 corporations in five Western European countries. We document that families are the most pronounced type of controlling shareholders in Western Europe. In fact, they control 43.9 percent of Western European firms. We also document a significant concentration of wealth within a small number of families. We report that, in Western Europe, pyramids and cross-holdings are used to gain control, and hence a significant separation of ownership from control is achieved but not to the benefit of controlling owners.

JEL Classifications: G32

Working Paper Series

Date posted: May 09, 2000 ; Last revised: November 11, 2001

Suggested Citation

Faccio, Mara and Lang, Larry H.P., The Separation of Ownership and Control: An Analysis of Ultimate Ownership in Western European Corporations (February 2000). EFA 0136. Available at SSRN: http://ssrn.com/abstract=222429 or doi:10.2139/ssrn.222429

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Contact Information

Mara Faccio (Contact Author) Purdue University - Krannert School of Management ( email ) 1310 Krannert Building West Lafayette, IN 47907-1310 United States
Centre for Economic Policy Research (CEPR) 90-98 Goswell Road London EC1V 7RR United Kingdom
European Corporate Governance Institute (ECGI) c/o ECARES ULB CP 114 B-1050 Brussels Belgium HOME PAGE: http://www.ecgi.org
Hsien Ping Larry Lang Chinese University of Hong Kong (CUHK) - Department of Finance ( email ) Shatin, N.T. Hong Kong +85 2 2609 7761 (Phone) +85 2 2603 6586 (Fax)