Abstract
In a corporation with many small owners, it may not pay any one of them to monitor the performance of the management. We explore a model in which the presence of a large minority shareholder provides a partial solution to this free-rider problem. The model sheds light on the following questions: Under what circumstances will we observe a tender offer as opposed to a proxy fight or an internal management shake-up? How strong are the forces pushing toward increasing concentration of ownership of a diffusely held firm? Why do corporate and personal investors commonly hold stock in the same firm, despite their disparate tax preferences?
Keywords
ShareholderTender offerCorporationBusinessCorporate governanceProxy (statistics)Stock (firearms)Control (management)DividendCorporate actionAccountingEconomicsFinanceManagement
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Publication Info
- Year
- 1986
- Type
- article
- Volume
- 94
- Issue
- 3, Part 1
- Pages
- 461-488
- Citations
- 8430
- Access
- Closed
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Cite This
Andrei Shleifer,
Robert W. Vishny
(1986).
Large Shareholders and Corporate Control.
Journal of Political Economy
, 94
(3, Part 1)
, 461-488.
https://doi.org/10.1086/261385
Identifiers
- DOI
- 10.1086/261385