The Trade-Off Between Risk and Control in Corporate Ownership

M.C. Manjon

    Research output: Working paperDiscussion paperOther research output

    235 Downloads (Pure)

    Abstract

    This paper analyses the risk control trade o$ in corporate ownership. It presents a simple model in which large shareholders decide their share depending on their risk aversion, risk-neutral effects attached to rm size and the e$ectiveness of di$erent (external and internal) mechanisms for controlling managers behaviour. Two institutional settings in which the expected benefits from control appear to overcome risk aspects are explored: the USA at the turn of the 20th century and Spain in the 1990's. The empirical evidence seems to support the predictions of the model regarding the relationship between ownership concentration, the characteristics of governance and the size of the firm.
    Original languageEnglish
    Place of PublicationTilburg
    PublisherVakgroep CentER
    Number of pages31
    Volume2003-81
    Publication statusPublished - 2003

    Publication series

    NameCentER Discussion Paper
    Volume2003-81

    Fingerprint

    Trade-offs
    Corporate ownership
    Ownership concentration
    Governance
    Prediction
    Managers
    Spain
    20th century
    Empirical evidence
    Risk aversion
    Risk control
    Large shareholders

    Keywords

    • Corporate Governance
    • Disciplinary Mechanisms
    • Large Shareholders

    Cite this

    Manjon, M. C. (2003). The Trade-Off Between Risk and Control in Corporate Ownership. (CentER Discussion Paper; Vol. 2003-81). Tilburg: Vakgroep CentER.
    Manjon, M.C. / The Trade-Off Between Risk and Control in Corporate Ownership. Tilburg : Vakgroep CentER, 2003. (CentER Discussion Paper).
    @techreport{2eb3b2829b904de9b4840f067fea1533,
    title = "The Trade-Off Between Risk and Control in Corporate Ownership",
    abstract = "This paper analyses the risk control trade o$ in corporate ownership. It presents a simple model in which large shareholders decide their share depending on their risk aversion, risk-neutral effects attached to rm size and the e$ectiveness of di$erent (external and internal) mechanisms for controlling managers behaviour. Two institutional settings in which the expected benefits from control appear to overcome risk aspects are explored: the USA at the turn of the 20th century and Spain in the 1990's. The empirical evidence seems to support the predictions of the model regarding the relationship between ownership concentration, the characteristics of governance and the size of the firm.",
    keywords = "Corporate Governance, Disciplinary Mechanisms, Large Shareholders",
    author = "M.C. Manjon",
    note = "Pagination: 31",
    year = "2003",
    language = "English",
    volume = "2003-81",
    series = "CentER Discussion Paper",
    publisher = "Vakgroep CentER",
    type = "WorkingPaper",
    institution = "Vakgroep CentER",

    }

    Manjon, MC 2003 'The Trade-Off Between Risk and Control in Corporate Ownership' CentER Discussion Paper, vol. 2003-81, Vakgroep CentER, Tilburg.

    The Trade-Off Between Risk and Control in Corporate Ownership. / Manjon, M.C.

    Tilburg : Vakgroep CentER, 2003. (CentER Discussion Paper; Vol. 2003-81).

    Research output: Working paperDiscussion paperOther research output

    TY - UNPB

    T1 - The Trade-Off Between Risk and Control in Corporate Ownership

    AU - Manjon, M.C.

    N1 - Pagination: 31

    PY - 2003

    Y1 - 2003

    N2 - This paper analyses the risk control trade o$ in corporate ownership. It presents a simple model in which large shareholders decide their share depending on their risk aversion, risk-neutral effects attached to rm size and the e$ectiveness of di$erent (external and internal) mechanisms for controlling managers behaviour. Two institutional settings in which the expected benefits from control appear to overcome risk aspects are explored: the USA at the turn of the 20th century and Spain in the 1990's. The empirical evidence seems to support the predictions of the model regarding the relationship between ownership concentration, the characteristics of governance and the size of the firm.

    AB - This paper analyses the risk control trade o$ in corporate ownership. It presents a simple model in which large shareholders decide their share depending on their risk aversion, risk-neutral effects attached to rm size and the e$ectiveness of di$erent (external and internal) mechanisms for controlling managers behaviour. Two institutional settings in which the expected benefits from control appear to overcome risk aspects are explored: the USA at the turn of the 20th century and Spain in the 1990's. The empirical evidence seems to support the predictions of the model regarding the relationship between ownership concentration, the characteristics of governance and the size of the firm.

    KW - Corporate Governance

    KW - Disciplinary Mechanisms

    KW - Large Shareholders

    M3 - Discussion paper

    VL - 2003-81

    T3 - CentER Discussion Paper

    BT - The Trade-Off Between Risk and Control in Corporate Ownership

    PB - Vakgroep CentER

    CY - Tilburg

    ER -

    Manjon MC. The Trade-Off Between Risk and Control in Corporate Ownership. Tilburg: Vakgroep CentER. 2003. (CentER Discussion Paper).