Preventing abuse by controlling shareholders

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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

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Rationality
Private benefits of control
Corporate governance
Control mechanism
Economics
Abuse
Behavioral theory
Shareholders
Controlling shareholders

Keywords

  • corporate governance
  • behavioral economics

Cite this

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Preventing abuse by controlling shareholders. / van Damme, E.E.C.

In: Journal of Institutional and Theoretical Economics, Vol. 169, No. 1, 2013, p. 190-196.

Research output: Contribution to journalArticleScientificpeer-review

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