Agency problems in firms are prevalent because of a scarcity of wealthy principals with corporate governance ability, whom we call We investigate how this scarce resource, is allocated. We show that the restructuring specialists may acquire blocks only in those states of the worls in which they can increase firm value the most, which corresponds to a takeover. Firms with dispersed ownership and firms with a financial intermediary as a blockholder can coexist, although they are otherwise identical. The moderl can explain differences in corporate ownership structures and restructuring mechanisms across economies.
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Volume (Year): 43 (2008) Issue (Month): 04 (December) Pages: 937-974 Download reference. The following formats are available: HTML
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