Dynamic Ownership, Private Benefits, and Stock Prices

56 Pages Posted: 10 Oct 2019

Date Written: September 30, 2019

Abstract

I quantify private benefits of control, and their impact on stock prices, by estimating a structural model of optimal shareholding using data on the ownership dynamics of Italian public companies. The results show that controlling shareholders generally have positive and persistent impact on stock prices, and the impact is larger during the last Eurozone debt crisis. The results imply that controlling shareholders are particularly beneficial for the rest of the company shareholders during negative economic cycles. I also provide evidence of a synergistic effect when the controlling shareholder is a corporation.

Keywords: Private Benefits, Controlling Shareholders, Ownership Dynamics, Structural Estimation, Stock Prices

JEL Classification: G11, G12, G14, G32

Suggested Citation

Corvino, Raffaele, Dynamic Ownership, Private Benefits, and Stock Prices (September 30, 2019). Available at SSRN: https://ssrn.com/abstract=3461674 or http://dx.doi.org/10.2139/ssrn.3461674

Raffaele Corvino (Contact Author)

University of Torino & CERP ( email )

Corso Unione Sovietica 218bis
Piazza Arbarello 8
Torino, 10134
Italy
+39 3465316931 (Phone)

HOME PAGE: http://raffaelecorvino.com

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