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An Economic Analysis Of Investor Protection In Corporations With Concentrated Ownership

Author

Listed:
  • Bennedsen, Morten

    (Department of Economics, Copenhagen Business School)

  • Wolfenzon, Daniel

    (Michigan Business School)

Abstract

We provide a theoretical analysis of the relationship between investor protection and the performance of corporations with concentrated ownership and apply it to analyze two types of investor protection. First, we analyze the cost and benefits of imposing super-majority requirements on certain important policy issues in the corporation. Second, we analyze why it can be in the interest of the corporation to impose restrictions on the free transferability of shares.

Suggested Citation

  • Bennedsen, Morten & Wolfenzon, Daniel, 2000. "An Economic Analysis Of Investor Protection In Corporations With Concentrated Ownership," Working Papers 15-2000, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2000_015
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    References listed on IDEAS

    as
    1. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    2. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    3. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    4. 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.
    5. Bennedsen, Morten & Wolfenzon, Daniel, 2000. "The balance of power in closely held corporations," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 113-139.
    6. Rafael La Porta & Florencio Lopez‐de‐Silanes & Andrei Shleifer & Robert W. Vishny, 2000. "Agency Problems and Dividend Policies around the World," Journal of Finance, American Finance Association, vol. 55(1), pages 1-33, February.
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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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