Control Consolidation With a Threshold:An Algorithm

20 Pages Posted: 26 Nov 2007

See all articles by Ariane Chapelle

Ariane Chapelle

University College London - Department of Computer Science

Ariane Szafarz

Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi

Date Written: May 2006

Abstract

Control tunneling over firms can be reached through pyramids, cross-ownership, and other complex features. This phenomenon is frequent in Europe and in Asia. However, the theoretical literature has not yet converged toward a well-defined and robust measurement of integrated control that takes into account the threshold for control as applied in practice. Based on graph theory, this paper aims at filling this gap and proposes a new algorithm for evaluating the control tunneling exerted by the firms' ultimate shareholders. Then, the paper discusses the various forms of control existing next to voting shares, like multiple voting rights, board representation and active monitoring, before suggesting ways to include them into the modeling of control.

Keywords: Ownership, Corporate control, ultimate shareholder

JEL Classification: G32, C67, L22

Suggested Citation

Chapelle, Ariane and Szafarz, Ariane, Control Consolidation With a Threshold:An Algorithm (May 2006). Available at SSRN: https://ssrn.com/abstract=906456 or http://dx.doi.org/10.2139/ssrn.906456

Ariane Chapelle

University College London - Department of Computer Science ( email )

Gower Street
London, WC1E 6BT
United Kingdom
+44(0)7833453854 (Phone)

Ariane Szafarz (Contact Author)

Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB) & CERMi ( email )

50 Avenue Roosevelt
Brussels 1050
Belgium

Register to save articles to
your library

Register

Paper statistics

Downloads
76
Abstract Views
666
rank
321,669
PlumX Metrics