Value of Corporate Control: Some International Evidence

Journal Of Investment Management; Third Quarter 2013

Posted: 2 Oct 2013

See all articles by Paul Hanouna

Paul Hanouna

Villanova University - School of Business

Atulya Sarin

Santa Clara University - Department of Finance

Alan C. Shapiro

University of Southern California - Marshall School of Business

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Date Written: September 30, 2013

Abstract

Existing literature shows that the market values control because controlling shareholder can generate private benefits and improve the efficiency of the corporation. In this study, we provide a measure of the value of control for a set of domestic and foreign transactions. Our measure of the value of control is the difference between the offer premium for minority and comparable majority transactions. We find that the median control premiums in the United States are around 30%. The control premium in "market-oriented" countries is higher than that for the "bank-oriented" countries. Also, we find that the premiums are lower in "cross-border" transactions relative to "domestic transactions."

Keywords: Corporate control, control premium

JEL Classification: G00

Suggested Citation

Hanouna, Paul E. and Sarin, Atulya and Shapiro, Alan C., Value of Corporate Control: Some International Evidence (September 30, 2013). Journal Of Investment Management; Third Quarter 2013. Available at SSRN: https://ssrn.com/abstract=2333799

Paul E. Hanouna (Contact Author)

Villanova University - School of Business ( email )

800 Lancaster Avenue
Villanova, PA 19085-1678
United States

Atulya Sarin

Santa Clara University - Department of Finance ( email )

Leavey School of Business and Administration
Santa Clara, CA 95053
United States
408-554-4953 (Phone)
408-904-4498 (Fax)

HOME PAGE: http://business.scu.edu/asarin

Alan C. Shapiro

University of Southern California - Marshall School of Business ( email )

Department of Finance
Los Angeles, CA 90089
United States

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