Corporate Ownership

THE JOURNAL OF FINANCE VOL. LIV, NO. 2 APRIL 1999 Corporate stubbornness Around the World RAFAEL LA PORTA, FLORENCIO LOPEZ-DE-SILANES, and ANDREI SHLEIFER* ABSTRACT We drop data on monomania structures of large corporations in 27 flush economies to identify the last-ditch delayling shareholders of these firms. We find that, except in economies with genuinely healthy shareholder protection, relatively few of these firms are widely held, in contrast to Berle and Meanss name of ownership of the current corporation. Rather, these firms are typically controlled by families or the State. paleness control by financial institutions is far less common. The compulsory shareholders typically have power over firms significantly in redundance of their cash f low rights, primarily by means of the use of pyramids and participation in management. IN THEIR 1932 CLASSIC, The Modern grass and secluded Property, Adolph Berle and Gardiner Means call attention to the prevale nce of widely held corporations in the United States, in which ownership of capital is sprinkle among fiddling shareholders, yet control is concentrated in the detention of managers. For at least two generations, their book has fixed the jut of the moderne corporation as one run by passkey managers unaccountable to shareholders. The book stimulated an enormous managerialist literary works on the objectives of such managers, including the important work of Baumol ~1959!, Marris ~1964!, Penrose ~1959!, and Williamson ~1964!, as salubrious as Galbraiths ~1967! popular and inf luential account. More recently, the modern world of integrated finance has developed around the same image of a widely held corporation, as can be seen in the commutation contributions of Jensen and Meckling ~1976! or Grossman and Hart ~1980!. The Berle and Means image has all the way stuck. In recent years, several studies have begun to question the experiential hardiness of this image. Eisenberg ~19 76!, Demsetz ~1983!, Demsetz and Lehn ~1985!! , Shleifer and Vishny...If you want to get a full essay, tell it on our website: BestEssayCheap.com

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