Do Norms Matter?: A Cross-Country Examination of the Private Benefits of Control

2001 ◽  
Author(s):  
John C. Coffee Jr.
Keyword(s):  
Private Benefits ◽  
Private Benefits Of Control ◽  
Cross Country

scholarly journals Private benefits of control in the banking industry: A cross-country analysis

2012 ◽  
Vol 10 (1) ◽  
pp. 487-498 ◽  
Author(s):  
Gianfranco Gianfrate ◽  
Emilio Santangelo ◽  
Laura Zanetti
Keyword(s):  
Banking Industry ◽  
Minority Shareholders ◽  
Private Benefits ◽  
Substantial Impact ◽  
Private Benefits Of Control ◽  
Control Transfer ◽  
Country Analysis ◽  
Cross Country ◽  
Specific Regulation ◽  
Legal Frameworks

The study explores the existence and magnitude of private benefits of control in the banking industry around the world. By analyzing 157 control-transfer transactions for banks in 40 countries, we are able to detect the existence of an average 3.3% block transaction premium as a measure of private benefits of control. Consistent with the legal origin theory about the protection of minority shareholders, we find that banks operating in French civil law regimes show on average higher premiums than the banks operating in other legal frameworks. The paper also investigates to what extent regulation and public policies can curb those benefits thus enhancing bank governance. While bank-specific regulation generally does not seem to have a substantial impact on private benefits of control, the regulation on entry appears to play a moderate role in curbing those benefits

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