This paper is the introductory chapter of Luca Enriques and Tobias Tröger (eds.), The Law and Finance of Related Party Transactions (Cambridge University Press: forthcoming). Its goal is to sketch out the individual chapters’ contributions to the...Read more
The separation of ownership and control has always been central in corporate governance debates. A large body of literature has sought to show that control-enhancing arrangements can deter investors. However, the experience of the last few years...Read more
We show that ambiguity aversion generates endogenous disagreement between a firm?s insider and outside shareholders. Outsiders are well-diversified, but the insider holds only equity of the firm, leading to endogenous difference of opinion. We...Read more
The separation of control and ownership ? the ability of a small group effectively to control a company though holding a minority of its cash flow rights ? is common throughout the world, but also is commonly decried. The control group, it is...Read more
This Article offers a new understanding of concentrated ownership ? the prevalent form of corporate ownership around the world ? by developing a framework for evaluating many corporate ownership patterns and exploring the resulting legal and...Read more
This paper develops a theory of the joint allocation of control and cash-flow rights in venture capital deals. When the need for VC advice and support calls for a highpowered outside claim, the entrepreneur should optimally retain control in...Read more
An inherent difficulty in valuing controlling blocks of shares is the illiquidity of the market. We explore the pricing implications associated with the illiquidity of controlling blocks of shares in the context of a search model of block trades...Read more
This Article investigates the determinants of dividend policy in firms with concentrated
ownership structure. A review of the empirical literature shows that dividend payout ratios are lower in firms with controlling shareholders. We...Read more
This paper analyses how outsiders, such as bidders or activist investors, overcome the lack of coordination and information among dispersed shareholders. We identify the two basic means to achieve this goal. First, the outsider must relinquish...Read more
The manner in which hostile takeovers have historically been executed has just begun
to receive serious academic attention. Similarly, while the literature on the accuracy and determinants of share prices is voluminous, there has been...Read more