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Ownership and Control in Colombian Corporations

Author

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  • Luis H. Gutiérrez
  • Carlos Pombo
  • Rodrigo Taborda

Abstract

This paper studies the separation of ownership and control for an average of 140 listed non-financial corporations in Colombia during the 1996-2002 period. Breaking down the sample according to corporations` listing status and economic activity shows that voting rights are greater than cash flow rights because of the presence of indirect ownership across firms that belong mainly to pyramidal and cross-share holdings. The study sample also includes an important set of non-affiliated firms. Ownership statistics show high concentration among the four largest voting blocks, which is similar to the levels observed in continental Europe, but the largest stake has voting rights that are on average 20 percent lower than the average observed in that region. Finally, holding investment and trust funds play a central role as the holdings` ultimate controllers.

Suggested Citation

  • Luis H. Gutiérrez & Carlos Pombo & Rodrigo Taborda, 2005. "Ownership and Control in Colombian Corporations," Research Department Publications 3220, Inter-American Development Bank, Research Department.
  • Handle: RePEc:idb:wpaper:3220
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    Cited by:

    1. Luis H Gutiérrez & Carlos Pombo, 2005. "Corporate Valuation and Governance: Evidence from Colombia," Borradores de Investigación 002203, Universidad del Rosario.
    2. Velloso, Helvia & Núñez Reyes, Georgina, 2009. "El papel de la gobernanza corporativa en la recuperación y desarrollo de los mercados de capital en Estados Unidos," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2012.
    3. Marc Levy & Ariane Szafarz, 2017. "Cross-Ownership: A Device for Management Entrenchment?," Review of Finance, European Finance Association, vol. 21(4), pages 1675-1699.
    4. Tristan Auvray & Olivier Brossard, 2013. "French connection: interlocking directorates and the ownership-control nexus in an insider governance system," Working Papers hal-00842582, HAL.
    5. Pombo, Carlos & Gutiérrez, Luis H., 2011. "Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business groups," Journal of Economics and Business, Elsevier, vol. 63(4), pages 251-277, July.
    6. Fortich, Roberto & Gutiérrez, Luis & Pombo, Carlos, 2008. "Board structure and firm performance: evidence from Colombia," Galeras. Working Papers Series 019, Universidad de Los Andes. Facultad de Administración. School of Management.
    7. Fernando Lefort, 2005. "Ownership Structure And Corporate Governance In Latin America," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 8(1), pages 55-84.
    8. Luis H. Gutiérrez & Carlos Pombo, 2005. "Valuación y gobierno corporativo: elementos de juicio de Colombia," Research Department Publications 3217, Inter-American Development Bank, Research Department.
    9. Marcela Eslava & Marcela Melendez, 2009. "Politics, Policies and the Dynamics of Aggregate Productivity in Colombia," Research Department Publications 4633, Inter-American Development Bank, Research Department.
    10. Paula, Germano M. de, 2009. "Gobernanza corporativa, políticas públicas, mercado de capitales e inversiones extranjeras," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2010.
    11. Clarke, Alvaro, 2009. "Buenos gobiernos corporativos para los negocios: el caso de Chile," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2015.
    12. Roberto Fortich Mesa, 2018. "[Documento] Controlling Shareholders and Contract Theory: A Review of Literature," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 12(1), pages 157-162, June.
    13. Paula, Germano M. de, 2009. "Gobernanza corporativa y mercado de capitales en Brasil," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2013.
    14. González, Maximiliano & Guzmán, Alexander & Pombo, Carlos & Trujillo, María-Andrea, 2013. "Family firms and debt: Risk aversion versus risk of losing control," Journal of Business Research, Elsevier, vol. 66(11), pages 2308-2320.
    15. Pombo, Carlos & Gutiérrez, Luis H., 2009. "Mercados de capitales y gobernanza corporativa en Colombia," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2016.
    16. Mr. Andre O Santos, 2015. "Integrated Ownership and Control in the GCC Corporate Sector," IMF Working Papers 2015/184, International Monetary Fund.
    17. Gutiérrez, Luis H. & Pombo, Carlos, 2009. "Corporate ownership and control contestability in emerging markets: The case of Colombia," Journal of Economics and Business, Elsevier, vol. 61(2), pages 112-139.
    18. Brancaccio, Emiliano & Giammetti, Raffaele & Lopreite, Milena & Puliga, Michelangelo, 2018. "Centralization of capital and financial crisis: A global network analysis of corporate control," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 94-104.
    19. González, Maximiliano & Trujillo, María Andréa & Guzmán, Alexander, 2009. "Colombian ADRs: Why so few?," Galeras. Working Papers Series 023, Universidad de Los Andes. Facultad de Administración. School of Management.
    20. González, Maximiliano & Guzmán, Alexander & Pombo, Carlos & Trujillo, María-Andrea, 2012. "Family firms and financial performance: The cost of growing," Emerging Markets Review, Elsevier, vol. 13(4), pages 626-649.
    21. Viscencio Brambila, Héctor, 2009. "Gobernanza corporativa: el caso de México," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2017.
    22. Tristan Auvray & Olivier Brossard, 2013. "French connection: interlocking directorates and the ownership-control nexus in an insider governance system," CEPN Working Papers hal-00842582, HAL.
    23. Alves, Paulo, 2012. "The puzzle of corporate control," MPRA Paper 52113, University Library of Munich, Germany, revised 2012.
    24. López-de-Silanes, Florencio, 2009. "Gobierno corporativo y mercados financieros en la OCDE y América Latina: lecciones para los cambios regulatorios después de la crisis financiera," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2011.

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    More about this item

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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