Abstract

http://ssrn.com/abstract=672701
 
 

References (49)



 
 

Citations



 


 



Controlling Firms Through the Majority Voting Rule


Ariane Chapelle


Department of Computer Science

Ariane Szafarz


Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi

February 2005

Physica A, Vol. 355, pp. 509-529, 2005

Abstract:     
Pyramids, cross-ownership, rings and other complex features inducing control tunnelling are frequent in the European and Asian industrial world. Based on the matrix methodology, this paper offers a model for measuring integrated ownership and threshold-based control, applicable to any group of interrelated firms. In line with the theory on pyramidal control, the model avoids the double counting problem and sets the full-control threshold at the conservative - but incontestable - majority level of 50% of the voting shares. Any lower threshold leads to potential inconsistencies and leaves unexplained the observed high level of ownership of many dominant shareholders. Furthermore, the models leads to ultimate shareholders' control ratios consistent with the majority voting rule. Finally, it is applied to the Frère Group, a large European pyramidal holding company known for mastering control leverages.

Keywords: Corporate Control, Corporate Governance, Majority Voting Rule, Pyramidal Ownership

JEL Classification: G32

Accepted Paper Series


Not Available For Download

Date posted: February 28, 2005 ; Last revised: March 14, 2011

Suggested Citation

Chapelle, Ariane and Szafarz, Ariane, Controlling Firms Through the Majority Voting Rule (February 2005). Physica A, Vol. 355, pp. 509-529, 2005. Available at SSRN: http://ssrn.com/abstract=672701 or http://dx.doi.org/10.2139/ssrn.672701

Contact Information

Ariane Chapelle (Contact Author)
Department of Computer Science ( email )
Gower Street
London, WC1E 6BT
United Kingdom
+44(0)7833453854 (Phone)
Ariane Szafarz
Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi ( email )
50 Avenue Roosevelt
Brussels 1050
Belgium
Feedback to SSRN


Paper statistics
Abstract Views: 1,029

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.297 seconds