Ownership structure and minority expropriation: the case for multiple blockholders

This article investigates minority expropriation in closely-held firms. Using a sample of Spanish firms for the period from 1996 to 2006, we find that firms that are more vulnerable to minority expropriation have blockholders controlling groups with aggregate equity stakes that are far removed from 50%, which is the point that maximizes the chances of expropriation. Moreover, performance improves when the controlling group's stake moves away from the region where expropriation is more likely -- the <italic>alignment effect</italic> -- and, if within this region, when the number of group members increases -- the <italic>bargaining effect</italic>.