The Nature of Corporate Ownership in the US: The Trend Towards the Market Oriented Blockholder Model
Capital Markets Law Journal, Vol. 5, No. 1, pp. 63-68, January 2010
Posted: 8 Dec 2009 Last revised: 17 Dec 2009
Date Written: December 1, 2009
This article examines the assumption that the ownership pattern in the US public firm is aptly characterized as diffused and argues that the evolutionary trend in the US has been towards a hybrid ownership structure, which I refer to as the Market Oriented Blockholder Model (MOBM). Under the model, it appears that market forces in the US equity markets have been pushing towards a state of ownership structure that affords the benefits of (i) increased monitoring (associated with the concentrated ownership model) and (ii) increased liquidity in the capital markets (associated with the dispersed ownership model). Implications of the MOBM to the convergence/divergence debate are also discussed.
Keywords: Blockholders, Capital Markets, Corporate Control, Corporate Governance, Evolution, Institutional Investors, Ownership
JEL Classification: G10, G18, G23, G32, G34, G38, K22
Suggested Citation: Suggested Citation