Abstract

https://ssrn.com/abstract=547742
 
 

References (35)



 
 

Citations (18)



 


 



Expropriation vs. Proportional Sharing in Corporate Acquisitions


Mara Faccio


University of Chicago - Booth School of Business; Purdue University - Krannert School of Management; European Corporate Governance Institute (ECGI); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

David Stolin


Toulouse Business School - Economics and Finance

May 2004


Abstract:     
An important and growing literature in finance points to existence of considerable benefits to being a controlling shareholder, especially when legal protection of minority shareholders is weak, and when separation of ownership from control is high. At the same time, the substantial and well established literature on mergers often finds these key corporate events to be subject to agency costs. Relying on these two arguments, we employ a novel application of the Bertrand et al. (2002) insight to study the hypothesis that controlling shareholders use acquisitions to expropriate resources to their benefit. The findings do not allow us to reject the null hypothesis of proportional sharing of acquisition gains in favor of the alternative hypothesis of expropriation of bidder's minority shareholders.

Number of Pages in PDF File: 51

Keywords: M&As, expropriation, controlling shareholder

JEL Classification: G3, G34


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Date posted: May 20, 2004  

Suggested Citation

Faccio, Mara and Stolin, David, Expropriation vs. Proportional Sharing in Corporate Acquisitions (May 2004). Available at SSRN: https://ssrn.com/abstract=547742 or http://dx.doi.org/10.2139/ssrn.547742

Contact Information

Mara Faccio (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
Purdue University - Krannert School of Management ( email )
1310 Krannert Building
West Lafayette, IN 47907-1310
United States
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )
BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore
David Stolin
Toulouse Business School - Economics and Finance ( email )
20, bd Lascrosses - BP 7010
Toulouse Cedex 7, 31068
France
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