Corporate Governance and Ownership Structure in Emerging Markets: Evidence from Latin America

27 Pages Posted: 8 Jul 2008

See all articles by Diego C. Cueto

Diego C. Cueto

ESAN Graduate School of Business

Date Written: July 8, 2008

Abstract

In a context of low protection for minority shareholders and large ownership concentration, I find that market participants impose a discount on the value of firms in which the voting rights of dominant shareholders exceed the cash-flow rights. However, investors prefer a dominant shareholder that is a corporation or a family group member rather than an institutional investor or a government agency. The evidence suggests that the stock market discount is lower when other corporations and family groups assume monitoring roles similar to that of creditors. Collusion between blockholders and dominant shareholders for the purpose of extracting private benefits of control, to the detriment of investors, is not evident.

Keywords: business groups, firm performance, emerging markets, panel data

JEL Classification: G15, G32, G34

Suggested Citation

Cueto, Diego C., Corporate Governance and Ownership Structure in Emerging Markets: Evidence from Latin America (July 8, 2008). Available at SSRN: https://ssrn.com/abstract=1157031 or http://dx.doi.org/10.2139/ssrn.1157031

Diego C. Cueto (Contact Author)

ESAN Graduate School of Business ( email )

Alonso de Molina 1652
Lima 33
Peru
(511) 317-7200 (Phone)
(511) 345-1328 (Fax)

HOME PAGE: http://www.esan.edu.pe/

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