Title: Concentrated ownership, market for corporate control, and corporate governance
Abstract: The paper studies corporate governance in non-listed firms. We analyze the effect of ownership concentration on the controlling owner’s incentives to share with outside investors in the presence of a threat of takeover. A simple model predicts that up to a certain level, an increase in ownership concentration improves corporate governance (defined as the costs of diverting profits). Using a dataset on ownership and corporate governance in Russian non-listed industrial firms we find that this model is consistent with the data. ∗This paper is based on a report on MPSF SETT project Guriev et al. (2003). We thank Erik Berflof, Mike Burkart, Boris Kuznetsov, Pavel Kuznetsov, and seminar and conference participants at CEFIR, Federation Council, Higher School of Economics, MPSF, Carnegie Moscow Center. The authors gratefully acknowledge financial support from USAID and Moscow Public Science Foundation through the Strengthening Economic Think Tanks Program, and from Ford Foundation through NES Research Center’s 2002-03 “Demand for economic institutions” project. †Department of Economics, Princeton University, and New Economic School, Moscow. E-mail: [email protected] ‡CEFIR. E-mail: [email protected] §CEFIR. E-mail: [email protected] ¶Institute for the Economy in Transition, Moscow. E-mail: [email protected]
Publication Year: 2004
Publication Date: 2004-01-01
Language: en
Type: article
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Cited By Count: 12
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