S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Department of Economics, Copenhagen Business School Working Paper Series, Department of Economics, Copenhagen Business School

No 16-2000:
CONTROL DILUTION AND DISTRIBUTION OF OWNERSHIP

Morten Bennedsen, Mogens Fosgerau and Daniel Wolfenzon

Abstract: We investigate the patterns of ultimate distribution of ownership in a sample of small closely held corporations. Motivated by recent corporate governance theories we define control dilution as the absenc of a single dominating shareholder. Most firms have one or two ultimate owners implying that control is very concentrated. However, we find strong evidence for control dilution in firms with multiple owners and we proceed to analyze three potential explanations: a general strategic motive, a coalition formation argument and the presence of family ownership. We find the strongest evidence for a general strategic motive and we clearly reject that the observed control dilution is due to family ownership. Finally, we show that the probability of control dilution increases with manager ownership and number of owners, but decreases with the age of the firm and with the presence of family ownership.

Keywords: Ownership Distribution; Control Allocation; Closely Held Corporations; (follow links to similar papers)

JEL-Codes: G32; G34; (follow links to similar papers)

36 pages, December 1, 2000

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

7614    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Lars Nondal ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:cbsnow:2000_016 This page was generated on 2014-12-14 19:21:48