Blockholder Scarcity, Takeovers, and Ownership Structures
Agency problems in firms are prevalent because of a scarcity of wealthy principals with corporate governance ability, whom we call “restructuring specialists.” We investigate how this scarce resource, “agency cost-free capital,” is allocated. We show that the restructuring specialists may acquire blocks only in those states of the worls in which they can increase firm value the most, which corresponds to a takeover. Firms with dispersed ownership and firms with a financial intermediary as a blockholder can coexist, although they are otherwise identical. The moderl can explain differences in corporate ownership structures and restructuring mechanisms across economies.
Year of publication: |
2008
|
---|---|
Authors: | Gorton, Gary ; Kahl, Matthias |
Published in: |
Journal of Financial and Quantitative Analysis. - Cambridge University Press. - Vol. 43.2008, 04, p. 937-974
|
Publisher: |
Cambridge University Press |
Description of contents: | Abstract [journals.cambridge.org] |
Saved in:
Saved in favorites
Similar items by person
-
Eat or be eaten : a theory of mergers and merger waves
Gorton, Gary, (2005)
-
Blockholder scarcity, takeovers, and ownership structures
Gorton, Gary, (2008)
-
Eat or be eaten : a theory of mergers and firm size
Gorton, Gary, (2009)
- More ...