Ownership structure, information and benefits of control in the experimental market

Abstract

Purpose

The purpose of this paper is to investigate the relationship among ownership structure, information disclosure and benefits of control under Lab‐experimental frame, based on the ownership structure in China's stock market.

Design/methodology/approach

Theoretical Shapley value of shareholders was used as the representative of control right, and benefits of control in different experimental treatments were studied.

Findings

Experimental results show: first, more counterbalance of shareholders' control rights, less benefits of their control right. Accordingly, more chance to form core alliance for the major shareholder with small shareholders, less chance for them to get control right; second, the effect of information on benefits of control are mainly reflected in forming and maintaining the alliance; third, Shapley value of the major shareholder and the information determine the alliance type; fourth, control premium may be the cost of keeping the major shareholder's benefits safe and fifth, imperfect information is not always bad, concealing information partly can improve the distribution efficiency of a corporation.

Originality/value

The paper provides experimental analysis of the behavioral logic behind the benefits of control, which would help to explain the relationship among ownership structure, information disclosure and benefits of control.

Citation

Li, J., Wang, G., Sun, J. and Liu, G. (2010), "Ownership structure, information and benefits of control in the experimental market", Nankai Business Review International, Vol. 1 No. 4, pp. 395-415. https://doi.org/10.1108/20408741011082561