Cross-Ownership Among Firms: Some Determinants of the Separation of Ownership from Control
AbstractThis paper demonstrates that the current literature on cross-ownership among firms underestimates the true degree of separation between cash flow rights and voting rights. We use accounting identities to define coefficients of control, such that any (direct or indirect) control of a firm may be identified using these coefficients. This procedure is sufficient to show that under cross-ownership the voting rights associated with ownership are typically underestimated. We demonstrate by example that control and ownership of dividend rights may be entirely separated, and that multiple equilibria may exist in economies with cross ownership.
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Bibliographic InfoPaper provided by Institute for Advanced Studies in its series Economics Series with number 113.
Length: 19 pages
Date of creation: Apr 2002
Date of revision:
Postal: Institute for Advanced Studies - Library, Stumpergasse 56, A-1060 Vienna, Austria
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
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