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The Swedish Corporate Control Model: Convergence, Persistence or Decline?

Author

Listed:
  • Henrekson, Magnus

    () (Research Institute of Industrial Economics (IFN))

  • Jakobsson, Ulf

    () (Research Institute of Industrial Economics (IFN))

Abstract

This paper explores the effects of deregulation and globalization on the dominant mode of corporate governance in Swedish public firms. The effects are multidimensional—the direction of change in corporate governance cannot be determined by simply examining whether a convergence towards the Anglo-Saxon model is occurring. Dispersed ownership with management control has not proven to be a viable model of corporate governance for Swedish listed companies. Instead, the control models with the most rapid growth in the most recent decades are found outside the stock market, notably private equity and foreign ownership. After a major revival of the Swedish stock market its importance for the Swedish economy is again in decline. Instead of adjustments in pertinent institutions and practices to ensure effectiveness of the corporate governance of Swedish public firms under these new conditions, a great deal of endogenous adjustment of the ownership structure has taken place.

Suggested Citation

  • Henrekson, Magnus & Jakobsson, Ulf, 2011. "The Swedish Corporate Control Model: Convergence, Persistence or Decline?," Working Paper Series 857, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:0857
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    References listed on IDEAS

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    1. Per-Olof Bjuggren & Johan Eklund & Daniel Wiberg, 2007. "Ownership structure, control and firm performance: the effects of vote-differentiated shares," Applied Financial Economics, Taylor & Francis Journals, vol. 17(16), pages 1323-1334.
    2. Henrekson, Magnus & Jakobsson, Ulf, 2001. "The Transformation of Ownership Policy and Structure in Sweden: Convergence towards the Anglo-Saxon Model?," SSE/EFI Working Paper Series in Economics and Finance 469, Stockholm School of Economics, revised 19 Sep 2002.
    3. Giannetti, Mariassunta & Simonov, Andrei, 2002. "Which Investors Fear Expropriation?," SIFR Research Report Series 10, Institute for Financial Research.
    4. Jesper Roine & Daniel Waldenström, 2009. "Wealth Concentration over the Path of Development: Sweden, 1873-2006," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(1), pages 151-187, March.
    5. Mike Burkart & Samuel Lee, 2008. "One Share - One Vote: the Theory," Review of Finance, European Finance Association, vol. 12(1), pages 1-49.
    6. Henrekson, Magnus & Jakobsson, Ulf, 2003. "The Swedish Model of Corporate Ownership and Control in Transition," Working Paper Series 593, Research Institute of Industrial Economics.
    7. Randall K. Morck, 2005. "A History of Corporate Governance around the World: Family Business Groups to Professional Managers," NBER Books, National Bureau of Economic Research, Inc, number morc05-1, June.
    8. Ulf Jakobsson & Magnus Henrekson, 2001. "Where Schumpeter was nearly right - the Swedish model and Capitalism, Socialism and Democracy," Journal of Evolutionary Economics, Springer, vol. 11(3), pages 331-358.
    9. Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
    10. Marco Becht & J. Bradford DeLong, 2005. "Why Has There Been So Little Block Holding in America?," NBER Chapters,in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 613-666 National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Josh Lerner & Joacim Tåg, 2013. "Institutions and venture capital," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 153-182, February.
    2. Johan Eklund & Johanna Palmberg & Daniel Wiberg, 2013. "Inherited corporate control and returns on investment," Small Business Economics, Springer, vol. 41(2), pages 419-431, August.
    3. Fogel, Kathy S. & Lee, Kevin K. & Lee, Wayne Y. & Palmberg, Johanna, 2013. "Foreign Investors as Change Agents: The Swedish Firm Experience," Working Paper Series in Economics and Institutions of Innovation 311, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    4. Waldenström, Daniel, 2014. "Swedish Stock and Bond Returns, 1856–2012," Working Paper Series 1027, Research Institute of Industrial Economics.
    5. Berg, Aron & Norbäck, Pehr-Johan & Persson, Lars, 2012. "International Mergers with Financially Constrained Owners," Working Paper Series 927, Research Institute of Industrial Economics.

    More about this item

    Keywords

    Corporate control; Corporate governance; Corporatism; Entrepreneurship; Ownership policy; Ownership structure; Swedish model;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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