Ownership, Control, and Pyramids in Spanish Commercial Banks

Posted: 12 Aug 2009

See all articles by Valentin Azofra-Palenzuela

Valentin Azofra-Palenzuela

University of Valladolid - Department of Finance and Accounting

Marcos Santamaría-Mariscal

University of Burgos

Date Written: August 10, 2009

Abstract

Using the law and finance approach we analyze how the ultimate ownership and control structure influences the performance of Spanish commercial banks during the period 1996-2004. Our evidence shows that 96% of Spanish commercial banks have an ultimate controlling owner. Also, we observe that whenever there is a gap between the ultimate controlling owner's cash flow and control rights, then the bigger the gap, the poorer the bank’s performance. We find that whenever there is no difference between the ultimate controlling owner's cash flow and control rights, there is a non-monotonic relation between ownership concentration and the bank’s performance.

Keywords: ownership, control, bank, pyramids, corporate governance

JEL Classification: G21, G34

Suggested Citation

Azofra-Palenzuela, Valentin and Santamaría-Mariscal, Marcos, Ownership, Control, and Pyramids in Spanish Commercial Banks (August 10, 2009). Available at SSRN: https://ssrn.com/abstract=1446708

Valentin Azofra-Palenzuela

University of Valladolid - Department of Finance and Accounting ( email )

Avda. Valle Esgueva 6
47011 Valladolid
Spain

Marcos Santamaría-Mariscal (Contact Author)

University of Burgos ( email )

Plaza Infanta Elena
Burgos, Burgos 09001
Spain
34 947 258968 (Phone)

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