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Corporate Law And Governance, Marco Becht, Patrick Bolton, Ailsa Röell
Corporate Law And Governance, Marco Becht, Patrick Bolton, Ailsa Röell
Center for Contract and Economic Organization
This chapter surveys the theoretical and empirical research on the main mechanisms of corporate law and governance, discusses the main legal and regulatory institutions in different countries, and examines the comparative governance literature. Corporate governance is concerned with the reconciliation of conflicts of interest between various corporate claimholders and the resolution of collective action problems among dispersed investors. A fundamental dilemma of corporate governance emerges from this overview: large shareholder intervention needs to be regulated to guarantee better small investor protection; but this may increase managerial discretion and scope for abuse. Alternative methods of limiting abuse have yet to be …
Controlling Controlling Shareholders, Ronald J. Gilson, Jeffrey N. Gordon
Controlling Controlling Shareholders, Ronald J. Gilson, Jeffrey N. Gordon
Faculty Scholarship
The rules governing controlling shareholders sit at the intersection of the two facets of the agency problem at the core of public corporations law. The first is the familiar principal-agency problem that arises from the separation of ownership and control. With only this facet in mind, a large shareholder may better police management than the standard panoply of market-oriented techniques. The second is the agency problem that arises between controlling and non-controlling shareholders, which produces the potential for private benefits of control. There is, however, a point of tangency between these facets. Because there are costs associated with holding a …
Why Ownership Matters? Entrepreneurship And The Restructuring Of Enterprises In Central Europe, Roman Frydman, Marek P. Hessel, Andrzej Rapaczynski
Why Ownership Matters? Entrepreneurship And The Restructuring Of Enterprises In Central Europe, Roman Frydman, Marek P. Hessel, Andrzej Rapaczynski
Faculty Scholarship
This paper, based on a study of mid-sized firms in the Czech Republic, Hungary, and Poland, seeks to explain the reasons behind the marked impact of ownership on firm performance which has been observed in a number of studies in Eastern Europe and other parts of the world. Focusing in particular on the differential impact of ownership on revenue and cost performance, the paper argues that privatized firms controlled by outside investors are more entrepreneurial than those controlled by corporate insiders or the state. The paper provides evidence that all state and privatized firms in transition economies engage in similar …