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Corporate Governance and Shareholder Rights in Russia

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Author Info
D Willer
Abstract

In an environment where shareholder rights cannot be enforced, management might choose to honour these rights out of self interest. This paper presents evidence from a sample of the 140 largest Russian joint stock companies, of which only a minority of firms do honour shareholder rights. These firms tend to have higher valuations on the equity market. On the other hand, the introduction of shareholder rights reduces the possibilities for management to steal. This paper develops a simple model and gives some empirical evidence on which firms are likely to choose to honour shareholder rights. In particular, I find that larger firms are more likely to honour shareholder rights, possibly because of the expected of stealing profits is smaller as the likelihood of punishment in the case of detection is higher. Furthermore, there is some evidence that large outside blockholders, as well as the state in its role as shareholder, are able to press for shareholder rights.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0343.

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Date of creation: Apr 1997
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Handle: RePEc:cep:cepdps:dp0343

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Rafael LaPorta & Florencio Lopez de-Silanes & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," Harvard Institute of Economic Research Working Papers 1768, Harvard - Institute of Economic Research.
    Other versions:
    • Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996. "Law and Finance," NBER Working Papers 5661, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    • Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December. [Downloadable!] (restricted)
  2. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-88, June. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Muravyev Alexander, 2004. "The Puzzle of Dual Class Stock in Russia. Explaining the Price Differential between Common and Preferred Shares," EERC Working Paper Series 04-07e, EERC Research Network, Russia and CIS. [Downloadable!]
  2. Kouznetsov Pavel & Muravyev Alexander, 2001. "Ownership Structure and Firm Performance in Russia: The Case of Blue Chips of the Stock Market," EERC Working Paper Series 01-10e, EERC Research Network, Russia and CIS. [Downloadable!]
  3. Iraj Hashi, 1997. "Mass Privatisation and Corporate Governance in the Czech Republic," Working Papers 003, Staffordshire University, Business School.
  4. Katharina Pistor & Martin Raiser & Stanislaw Gelfer, 2000. "Law and Finance in Transition Economies," CID Working Papers 49, Center for International Development at Harvard University. [Downloadable!]
  5. Alexander Muravyev, 2007. "Dual Class Stock in Russia: What Explains the Price Differential between Common and Preferred Shares?," Discussion Papers of DIW Berlin 680, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  6. Irina Denisova & Stanislav Kolenikov & Ksenia Yudaeva, 2000. "Child Benefits and Child Poverty," Working Papers w0006, Center for Economic and Financial Research (CEFIR). [Downloadable!]
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