The purpose of the paper is to synthesize and evaluate the stream of research that links large shareholders to the production of shared corporate benefits.
The methodology is to review the literature with an emphasis on the development of findings.
The presence of large shareholders is positive only if their incentives are aligned with other owners and they have the power to exert influence. The presence of large shareholders, even those whose interests are aligned with owners, does not always result in stronger governance structures.
The research is limited by the existing stream of literature and the completeness of our search process.
A synthesis and evaluative summary of the research is presented that may be used by researchers, executives, and board members.
From a research viewpoint, effective research designs should incorporate both incentive and power when assessing the monitoring role of large shareholders to aid in the validity and comparability of research results. From a practice viewpoint, managers and board members may use our summary figure to evaluate power relationships and likely reactions to strategic and tactical decisions in their firm's governance structure.
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