Private benefits extraction in closely-held corporations: the case for multiple large shareholders
This paper investigates how multiple large shareholders share control and extract private benefits in closely-held corporations. We find that ownership structures with multiple large shareholders are common and very stable. Moreover, they seem to be, to a large extent, exogenously given. The structure of the controlling group of shareholders has a very significant impact on performance. Performance improves as the control group's ownership stake increases and, for a given ownership stake, as the number of members increases. The economic significance of the effects indicates that minority expropriation is a very important problem in closely-held firms.
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