← Search

Journal of Finance Vol. 59 No. 2 2004

Private Benefits of Control: An International Comparison

Alexander Dyck1,2,3,4,5; Luigi Zingales2,6

1 University of Southern California · 2 Georgetown University · 3 University of Toronto · 4 University of Chicago · 5 University of Pennsylvania · 6 The Stables

open access

Abstract

We estimate private benefits of control in 39 countries using 393 controlling blocks sales. On average the value of control is 14 percent, but in some countries can be as low as −4 percent, in others as high a +65 percent. As predicted by theory, higher private benefits of control are associated with less developed capital markets, more concentrated ownership, and more privately negotiated privatizations. We also analyze what institutions are most important in curbing private benefits. We find evidence for both legal and extra‐legal mechanisms. In a multivariate analysis, however, media pressure and tax enforcement seem to be the dominating factors.

DOI
10.1111/j.1540-6261.2004.00642.x
Volume
59
Issue
2
Pages
537-600
Language
en
Sources
bibtex:phds-export.bib openalex crossref

Cite