Path Dependence or Convergence? The Evolution of Corporate Ownership Around the World
-
Andrew Jia-Yuh Yeh
We offer a model that sheds light on the debate over whether corporate ownership concentration converges to the Berle-Means image. Our model takes into account the importance of both legal rules and firm-specific arrangements. Our analytical result is that share ownership concentration either persists or falls depending on the relative importance of these protective arrangements. In particular, our model predicts: (a) diffuse corporate ownership in nations that impose legal limits on blockholders’ clout to expropriate minority shareholder rights, and (b) concentrated corporate ownership in nations that rely on asset specificity as a form of investor protection.Our empirical work suggests partial convergence toward Berle-Means diffuse share ownership. It is thereby reasonable to infer the existence of path dependent forces on ownership concentration. But this result does not preclude the possibility of functional convergence or convergence to the diffuse form of share ownership via cross-listings on the major U.S. stock exchanges that impose stringent disclosure and listing requirements. In essence, these results suggest a case for the co-existence of the preexisting path-dependency and functional-convergence stories.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Article
- The Law and Economics of Cedar-Apple Rust: State Action and Just Compensation in Miller v. Schoene
- Does Punishment Matter? A Refinement of the Inspection Game
- Optimal Law Enforcement when the Offender can Dispose of his Wealth
- Rationalizing Drennan: On Irrevocable Offers, Bid Shopping and Binding Range
- Searching for Efficient Enforcement: Officer Characteristics and Racially Biased Policing
- Redistribution Mechanisms
- Using the Event Study Methodology to Measure the Social Costs of Litigation - A Re-Examination Using Cases from the Automobile Industry
- Comparative Causation and Economic Efficiency: When Activity Levels are Constant
- Less Crime, More (Vulnerable) Victims: Game Theory and the Distributional Effects of Criminal Sanctions
- Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization
- Economic Analysis of Law in North America, Europe and Israel
- Path Dependence or Convergence? The Evolution of Corporate Ownership Around the World
- On the Similarity of Bilateral Harm and Unilateral Harm with Role-Type Uncertainty
- The Division of Profit in Sequential Innovation for Probabilistic Patents
- Accuracy Enhancement, Agency Costs, and Disclosure Regulation
Articles in the same Issue
- Article
- The Law and Economics of Cedar-Apple Rust: State Action and Just Compensation in Miller v. Schoene
- Does Punishment Matter? A Refinement of the Inspection Game
- Optimal Law Enforcement when the Offender can Dispose of his Wealth
- Rationalizing Drennan: On Irrevocable Offers, Bid Shopping and Binding Range
- Searching for Efficient Enforcement: Officer Characteristics and Racially Biased Policing
- Redistribution Mechanisms
- Using the Event Study Methodology to Measure the Social Costs of Litigation - A Re-Examination Using Cases from the Automobile Industry
- Comparative Causation and Economic Efficiency: When Activity Levels are Constant
- Less Crime, More (Vulnerable) Victims: Game Theory and the Distributional Effects of Criminal Sanctions
- Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization
- Economic Analysis of Law in North America, Europe and Israel
- Path Dependence or Convergence? The Evolution of Corporate Ownership Around the World
- On the Similarity of Bilateral Harm and Unilateral Harm with Role-Type Uncertainty
- The Division of Profit in Sequential Innovation for Probabilistic Patents
- Accuracy Enhancement, Agency Costs, and Disclosure Regulation
