Preventing abuse by controlling shareholders

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper is a comment on Ronald Gilson and Alan Schwarz “Constraints on Private Benefits of Control: Ex Ante Control Mechanisms versus Ex Post Transaction Review”. Together with that paper it will appear in the Journal of Institutional and Theoretical Economics 169 (1) in 2013, in a special issue devoted to Behavioral Theory of Institutions. I argue that the arguments of Gilson and Schwarz are convincing, but that the underlying assumptions may be stronger than the authors suggest. In particular, the G&S paper adopts a US shareholder perspective on corporate governance and is based on standard rationality assumptions. In this comment, I discuss whether and to what extent the recommendations are relevant in the EU context and whether the paper’s conclusions are robust when insights from behavioral economics are included.
Original languageEnglish
Pages (from-to)190-196
JournalJournal of Institutional and Theoretical Economics
Volume169
Issue number1
Early online date19 Feb 2013
Publication statusPublished - 2013

Keywords

  • corporate governance
  • behavioral economics

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