Concepedia

Corporate Control around the World

The Journal of Finance · 2020 · 213 citations · 50 references

TL;DR

The study investigates corporate control by tracing controlling shareholders in thousands of listed firms across 127 countries from 2004 to 2012. The authors analyze controlling shareholder data for these firms over the period. Government and family control is pervasive in civil‑law countries, less so in common‑law countries, with blocks common across firm sizes, while the development‑control nexus is strong for large firms but absent for small ones; control correlates strongly with shareholder protection, employment contract stringency, and union power, but weakly with creditor rights, legal formalism, and entry regulation, supporting legal origin and political theories of financial development.

Abstract

ABSTRACT We study corporate control tracing controlling shareholders for thousands of listed firms from 127 countries over 2004 to 2012. Government and family control is pervasive in civil‐law countries. Blocks are commonplace, but less so in common‐law countries. These patterns apply to large, medium, and small firms. In contrast, the development‐control nexus is heterogeneous; strong for large but absent for small firms. Control correlates strongly with shareholder protection, the stringency of employment contracts and unions power. Conversely, the correlations with creditor rights, legal formalism, and entry regulation appear weak. These patterns support both legal origin and political theories of financial development.