Journal of Political Economy Vol. 94 No. 3, Part 1 1986
Large Shareholders and Corporate Control
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?
- DOI
- 10.1086/261385
- Volume
- 94
- Issue
- 3, Part 1
- Pages
- 461-488
- Language
- en
- Sources
- openalex crossref