We examine the influence of ownership structure on a blockholder’s power in a firm. We first describe the presence and ownership stakes of blockholders in a comprehensive sample of US firms. We develop a measure of the influence of the ownership structure on a blockholder’s power and show that an average blockholder loses 12% of her potential power due to the presence and size of the ownership stakes of other blockholders. Further, the influence of ownership structure varies systematically with a blockholder’s rank and identity, with the second and nonfamily manager blockholders experiencing the largest loss of power.
For helpful comments, we thank Harjeet Bhabra, Melissa Toffanin, and Parianen Veeren and participants at the 2014 India Finance Conference. We would like to thank Lora Dimitrova, Anna Kaolina, Charles Martineau, Yulia Orlova, Gyongwon (Ray) Park, and Neiliane Williams for excellent research assistance. The authors gratefully acknowledge financial support from the Social Sciences and Humanities Research Council (SSHRC) of Canada and the Desjardins Centre for Innovation in Business Finance. Paeglis also gratefully acknowledges financial support from the Institut de Finance Mathematique de Montreal (IFM2). We remain solely responsible for any remaining errors.
Basu, N., Paeglis, I. and Rahnamaei, M. (2015), "Ownership Structure and Power: Evidence from US Corporations", International Corporate Governance (Advances in Financial Economics, Vol. 18), Emerald Group Publishing Limited, pp. 1-45. https://doi.org/10.1108/S1569-373220150000018001Download as .RIS
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