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Discussion Paper Details

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Title: Corporate Control around the World

Author(s): Gur Aminadav and Elias Papaioannou

Publication Date: April 2019

Keyword(s): Corporate Control, family firms, Government ownership, investor protection, Law and Finance, Ownership Concentration and regulation

Programme Area(s): Financial Economics and International Macroeconomics and Finance

Abstract: We provide an anatomy of corporate control around the world after tracing controlling shareholders for thousands listed firms from 127 countries between 2004 and 2012. The analysis reveals considerable and persistent differences across and within regions, as well as across legal families. Government and family control is pervasive in civil-law countries. Equity blocks in widely-held corporations are commonplace, but less so in common-law countries. These patterns apply to large, medium, and small listed firms. In contrast, the association between income and corporate control is highly heterogeneous; the correlation is strong among big and especially very large firms, but absent for medium and small listed firms. We then examine the association between corporate control and various institutional features. Shareholder rights against insiders' self-dealing activities correlate strongly with corporate control, though legal formalism and creditor rights less so. Corporate control is strongly related to labor market regulations, concerning, among others, the stringency of employment contracts, the power and extent of unions. The large sample correlations, thus, offer support to both legal origin and political-development theories of financial development.

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Bibliographic Reference

Aminadav, G and Papaioannou, E. 2019. 'Corporate Control around the World'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13706