Abstract

http://ssrn.com/abstract=331320
 
 

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Equity Ownership and Firm Value in Emerging Markets


Karl V. Lins


University of Utah - Department of Finance


Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
This paper investigates whether management ownership structures and large non-management blockholders are related to firm value across a broad sample of firms from emerging markets. I find that firm values are lower when control and cash flow rights of a firm's management group are separated, which indicates that the private benefits of control are reflected in the price paid by non-controlling shareholders. My results also suggest that large non-management blockholders can reduce these private benefits. The separation of management group ownership and control has a significantly more negative relation to value in countries with low shareholder protection, whereas large non-management blockholders have a significantly more positive relation. These results imply that private control benefits are discounted even more by minority shareholders where external shareholder protections are weak and that large non-management blockholders can act as a partial substitute for these missing institutional governance mechanisms.

JEL Classification: G32, G30

Accepted Paper Series





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Date posted: February 10, 2003  

Suggested Citation

Lins, Karl V., Equity Ownership and Firm Value in Emerging Markets. Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=331320

Contact Information

Karl V. Lins (Contact Author)
University of Utah - Department of Finance ( email )
David Eccles School of Business
Salt Lake City, UT 84112
United States
801-585-3171 (Phone)
801-581-7214 (Fax)
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