A Survey of Blockholders and Corporate Control

[...]In this paper, I survey the academic literature onblockholders and corporate control. As with any survey paper,I must be selective. Thus, I focus on empirical research, as Ibelieve that much of what we know about blockholders hascome through empirical investigations as opposed totheoretical models, although there certainly are some insightfultheoretical papers on blockholders. Moreover, this paper is nota traditional, full-fledged literature survey. Instead, I focus onwhat the literature tells us about four fundamental questionsassociated with blockholders: How prevalent are blockholders?What motivates block ownership? What impact do blockholdershave on certain major corporate decisions? What impact doblockholders have on firm value?The paper is organized as follows. Section 2 summarizesthe data on the extent of block ownership and how theconcentration of ownership has changed over time. Section 3 addresses the motivation of block ownership and the types offirms that tend to have concentrated ownership. Section 4examines how block ownership affects three major corporatedecisions: leverage, executive compensation, and the incidenceof takeovers. Section 5 addresses the complex relationshipbetween block ownership and firm value. A brief conclusionfollows.