Ceding ownership to outside investors provides a control dilemma for founders. In less developed capital markets with weaker formal institutions, we argue that retained founder director ownership can lower the transaction costs of external capital. Our argument rests on incomplete contracting...

We investigate the impact of state ownership structure on asset prices and corporate policies. By primarily focusing on China's corporations, we show that the relationship between expected returns and capital investment varies significantly across state owned enterprises (SOE) and private owned...

This study shows that firms regard stock price fragility - exposure to non-fundamental demand shocks stemming from the composition of equity ownership - as a salient corporate risk. We model ex-ante corporate responses to higher potential for future stock market misvaluation and then empirically...

This paper reviews the theoretical and empirical literature on the role of blockholders (large shareholders) in corporate governance. We start with the underlying property rights of public corporations; we discuss how blockholders are critical in addressing free-rider problems and why, like...

This paper reviews the theoretical and empirical literature on the role of blockholders (large shareholders) in corporate governance. We start with the underlying property rights of public corporations; we discuss how blockholders are critical in addressing free-rider problems and why, like...

In this paper we analyze an entrepreneur /manager's choice between private and public ownership in a setting in which management needs some elbow room or autonomy to optimally manage the firm. In public capital markets, the corporate governance regime in place exposes the firm to exogenous...

This research addresses incentive principles that drive information sharing and affect database value. Many real world centralization and standardization efforts have failed, typically because departments lacked incentives or needed greater local autonomy. While intangible factors such as...

I examine one action hedge fund managers take to increase their assets under management: by selling ownership stakes in their firms to outside owners. Fund companies that sell stakes to outside owners open more new funds and attract higher fund flows. The flow impact is greater for funds who...

This paper develops a unified theory of blockholder governance and the voting premium. It explains how and why a voting premium emerges in the absence of takeovers and controlling shareholders. The model features a minority blockholder and dispersed shareholders who trade shares in a competitive...

We explore how financial market trading shapes the ownership structure of industry rivals. In equilibrium, only a fraction of identical investors acquires positions in all firms (common owners). Investors’ ability to influence competition generates: (i) either strategic complementarity or...