Private Benefits of Control, Ownership Structure, and CEO Turnover: Evidence from East Asia

2014 ◽  
Author(s):  
C.S. Agnes Cheng ◽  
Jinshuai Hu ◽  
Walid Saffar
Keyword(s):  
East Asia ◽  
Ownership Structure ◽  
Ceo Turnover ◽  
Private Benefits ◽  
Private Benefits Of Control

scholarly journals What motivates block share ownership?

2014 ◽  
Vol 11 (2) ◽  
pp. 349-363 ◽  
Author(s):  
Asjeet S. Lamba ◽  
Geof Stapledon
Keyword(s):  
Ownership Structure ◽  
Publicly Traded ◽  
Private Benefits ◽  
Private Benefits Of Control ◽  
Share Ownership ◽  
Factors Associated ◽  
Large Shareholders ◽  
The Relationship ◽  
The U.S

Diffuse share ownership is not as pronounced in the U.S. as many would assume. This has led to a body of research examining large shareholders, or blockholders. Issues addressed include whether firms with a blockholder perform better or worse than widely-held firms; whether firms with a blockholder pay their executives differently to widely-held firms; and whether the presence of a blockholder increases or decreases the incidence takeovers. Another issue, which this paper explores, is what motivates block share ownership. Bebchuk (1999a, 1999b) develops a model which predicts that a firm is more likely to have a controlling blockholder if the anticipated private benefits of control at that firm are comparatively large. This paper examines the factors associated with ownership structure among publicly traded Australian firms. Our results indicate that private benefits of control are a significant factor in explaining the differences in ownership structure among Australian firms. As importantly, we also find that the relationship between the existence of a blockholder and private benefits of control is endogenous. That is, the presence of a controlling blockholder strongly influences the prevalence of these private benefits of control.

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