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The partial privatization of state-owned enterprises (SOEs) is a dynamic process. The main feature of this process lies in not only gradual and sequential privatizations but also privatized shares transfer. For partially privatized SOEs, the introduction of private sector ownership is not the end of the story because the previously introduced private owners may choose to leave the SOEs by transferring the privatized shares after privatization, a process that is called “privatized shares transfer”. This paper aims to investigate the determinants of privatized shares transfer (PST) from the perspective of large shareholders’ control rights.

Considering the pyramidal structure of Chinese listed companies, this paper extends existing analyses to study the impact of the ultimate controller’s control rights on privatized shares transfer. This paper also investigates the relationship between excessive control rights of the largest controlling shareholder and PST in view of the principle of equity of rights and obligations. In addition to a perspective on the holding of key positions by large shareholders, this paper further explores the impacts of the ownership of the largest controlling shareholder on privatized shares transfer.

The results capture the fact that the higher control rights of large shareholders lead to more privatized shares transfer. After exploring the impacts of excessive control rights, the results provide evidence supporting the idea that firms with excessive numbers of directors, senior managers or supervisors who also have positions in the largest controlling shareholder’s entity are more likely to transfer privatized shares owned by private owners. In addition, the largest shareholders’ ownership also plays a role in privatized shares transfer.

This evidence suggests that the large shareholders’ control rights should be limited to an appropriate range during the process of privatization, thereby giving private shareholders more opportunity to participate in the operation of firms, strengthen the state and enhance the competitiveness of state capital.

The purpose of this paper is to study the capital structure of firms when controlling shareholders decide on the level of debt financing in an environment with poor legal protection.

Theoretically this paper uses a dynamic model to analyze how the controlling shareholder expropriates the firm's benefit through debt financing. Empirically this paper uses a sample of Chinese publicly listed firms from 2004 to 2007, through the method of OLS and panel data, to verify the theoretical predictions.

Theoretically this paper finds that firms with controlling shareholders will take excess debt financing in an environment of controlled interest rate and poor legal protection to minority shareholders. Government intervention exacerbates while controlling shareholder's cash flow rights constrains excess debt financing. The empirical results conclude that the improvement of the legal environment, limiting government intervention, and raising controlling shareholder's cash flow rights will effectively reduce excess debt level, as well as long‐term debt ratio.

First, this paper provides a theoretical model to explain the mechanism of how the ownership structure, legal environment and government intervention interact to impact debt financing. This result also provides a theory to explain the “paradox” in a transitional economy that better legal protection lowers debt level and long‐term debt ratio. Second, this paper provides further evidence on controlling shareholder's expropriation to minority shareholder through debt financing.

This study investigates if the widely held predictors of corporate leverage exhibit predictive consistency through times and across countries amidst country heterogeneities such as legal principles, state of economic development and protection of investors’ rights.

We employ financial data for 3,197 unique firms from eight emerging and ten developed countries during the years 2001–2017 and use Tobit regression models, a two-step Fama−MacBeth(1973) regression and panel data regression techniques in order to ensure the robustness of estimates.

We find that firms in the civil French law system exhibit the highest average of a debt (around 27%), whereas firms based in high investors’ protection environment and in developed nations borrow significantly less than their counterparts. Furthermore, among predictors, including a firm's payout ratio, it returns on equity and the cash ratio except the P/B ratio have varying predictability for a corporate debt when firms are classified based on law systems, investors’ rights and the economic scenarios. The crisis period significantly affects the relationship of debt levels with legal systems, investors’ rights and economic development scenario. The author’s estimates are robust to alternate analysis.

This study is unique in its methodological approach and involves a considerably large number of countries and a longer study period for the results to be more generalizable compared to other existing studies.

The purpose of this paper is to empirically test how ultimate controlling shareholders' ownership‐control rights divergence and government intervention affect choice of capital structure (CS), and how the relationship between controlling shareholders' ownership‐control rights divergence and choice of CS is affected by government intervention.

Integrating the institutional background of China, the paper adopts balanced panel data containing related continuously obtainable information of 1,076 non‐financial companies listed in Shanghai and Shenzhen from 2004 to 2008 (a total of 5,380 observed values), and applies a series of generalised least squares to empirically test how ultimate controlling shareholders' ownership‐control rights divergence and government intervention affect choice of CS, and how the relationship between controlling shareholders' ownership‐control rights divergence and choice of CS is affected by government intervention.

The empirical evidence provided by this paper indicates that: controlling shareholders' ownership‐control rights divergence is negatively correlated with leverage; government intervention is positively correlated with leverage; and government intervention will weaken the negative relationship between controlling shareholders' ownership‐control rights divergence and leverage, and make debt capital suppliers (especially financial institutions like banks, etc.) provide loans, especially long‐term ones, to companies with high ownership‐control rights divergence.

So far, it is still little‐known how ownership‐control rights divergence affects choice of CS and how government intervention affects the relationship between ownership and control rights divergence and choices of CS. This paper is the first to test how ultimate controlling shareholders' ownership‐control rights divergence and government intervention affect choice of CS, and how the relationship between controlling shareholders' ownership‐control rights divergence and choice of CS is affected by government intervention based on the institutional background of China.

The objective of this study is to investigate further the interplay between corporate governance and firm performance with special focus on a situation expected to bring larger agency costs to the firm, that is, when voting rights of the dominant shareholder exceed his/her cash flow rights.

The research is conducted in Canada over a four‐year period from 2002 to 2005 and uses a balanced sample of 130 firms or 520 firm‐year observations. Corporate governance is measured based on the ROB corporate governance index published by The Globe and Mail.

The results clearly show a positive and significant relationship between the ROB governance scores and Tobin's Q, when there is a separation between voting and cash flow rights. In the absence of any excess voting rights, no significant relation is found between governance and performance.

The findings suggest that regulators need to exercise caution before deciding whether or not to recommend or impose corporate governance rules for all firms, since the benefits of these rules may vary among the firms.

The study contributes to explaining mixed international evidence on the governance‐performance relationship, while directing attention to the moderating effect of the deviation from the one share‐one vote principle. To the best of the authors' knowledge, no other study using corporate governance indices has taken into account the impact of excess voting rights despite the widespread use of that practice outside the USA.

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.

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

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.

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.

This paper aims to investigate the impact of the largest shareholder's voting stake on the firm's capital structure decision.

To empirically analyze the influence of the voting stake on leverage, a large sample of 814 exchange-listed firms is applied. The baseline regression analysis is complemented by several robustness tests and a difference-in-difference regression analysis to mitigate endogeneity concerns.

The authors find a negative relationship between the voting stake of the largest shareholder and leverage, consistent with the notion that large, undiversified shareholders have the incentive to reduce risk. Additionally, results reveal that family control has a positive moderating effect, indicating that the negative relationship is less pronounced for family controlled firms.

The authors contribute to the research by suggesting ownership concentration as another determinant of capital structure. Further, the authors add to the literature by showing how the association between ownership concentration and leverage is moderated by family control and that the identity of the largest shareholder is of great importance.

The paper provides important insights to the current debate on the proposal of the European Commission to reintroduce shares with multiple votes as part of the Listing Act. The authors expect the regulation to exacerbate the concentration of voting rights, which results in lower leverage and thus limits corporate growth.

The authors differentiate from previous studies by focusing the largest shareholders' voting stake, instead of using the ownership stake, to assess the impact of ownership concentration on leverage.

The study examines the role of a country's legal system in predicting the corporate cash holdings using a sample of 18 countries inherited with distinct legal traditions. The central point of the study is the comparative assessment of legal frameworks in shaping the corporate finance policies.

The authors employ host of regression techniques including dummy variables, panel data regression and Fama–MacBeth regressions to establish the relationship.

The study results support the idea of “theory of law and finance” that legal tradition is a key factor determining corporate behaviour and policy. In particular, the authors observe that firms operating in civil law systems hold significantly higher cash as compared to their peers from common law systems. Moreover, the authors report that the law system affects the corporate cash holdings through the channels of economic development and shareholder's protection, yet in opposite directions. This is because the authors find that in developed countries where civil law tradition prevails, firms hold reasonably higher cash. Moreover, if the firm belongs to high investors' protection country with civil law traditions, the cash holdings get substantially reduced. Besides, the authors find that the predictability of widely held determinants of cash holdings is not invariant of law traditions, and it holds true also when analysed in conjunction with the financial crisis. Overall, the authors find support for their postulation that corporate cash management policies are likely to be different across legal traditions. The study results are robust to the controls for various firm and country-specific antecedents of cash holdings and to the alternate econometric techniques.

The study findings would encourage the government and firm policymakers and regulators in strengthening the investor protection rights which would further augment the legal system and firm-specific corporate governance mechanisms. This would mitigate agency issues and managers would be forced to undertake investor-friendly financial policies especially corporate cash holdings which would be resulting into shareholder value maximization.

The study contributes uniquely since the existing literature is largely silent on the role that legal tradition of a country has on the cash holdings of its firms.

In this chapter, we are among the first to investigate the actual course of affairs in AGMs with respect to shareholder forum rights. In the first part of the chapter, we provide descriptive statistics on the use of the right to ask questions and speak in AGMs in the Netherlands. We find that in an average meeting there are around 42 questions and remarks made by around 8 shareholders. Most of these questions and remarks seem to be relevant; with a categorization framework of 14 topics, we could already identify over 50% of these questions and remarks. However, we also find that the average number of shareholders that physically ask questions is only 8. Next, we consider the determinants of the use of these forum rights. In several panel data analyses with a Poisson distribution and a negative binomial distribution, we, inter alia, found that the ‘importance of the meeting’ generally contributes to the amount of questions and remarks and the number of shareholders that actively engage in discussions. We have also found that the number of speakers – and the number of private investors – that actively attend the AGM depends on previous attendance numbers. This may imply that there is a small base of very active (private) investors in the Netherlands. We conclude that the forum function of AGMs is definitely relevant, but given the low number of shareholders that make use of these rights, amendments may be considered.

The purpose of this paper is to determine whether the Board Neutrality Rule and the primacy afforded to shareholders during takeovers is justified under common law and policy.

The paper provides a detailed assessment of the role play by the board neutrality rule and whether this is supported by takeover law and Company law. A review of case law and statutes is provided. The paper is largely analytical.

The paper finds little justification for the continued imposition of the Board Neutrality Rule.

The paper adds to the growing body of research literature which has analysed the role played by the Board Neutrality Rule during takeovers.