Library

Home > Library > The cross-country evolution of corporate ownership and governance

The cross-country evolution of corporate ownership and governance

Author Andy Yeh Alpha

This research article provides our mathematical analysis of the gradual evolution of corporate ownership concentration around the world.

Description:

We derive and develop a simple and intuitive model that shines fresh light on the relentless debate over whether corporate ownership converges to the Berle-Means modern corporation with high stock ownership dispersion. Our model takes into account the importance of both protective legal institutions and firm-specific asset arrangements. The main analytical result is that incumbent stock ownership concentration either persists or declines depending on the relative importance of these protective arrangements. Specifically, our model predicts: (a) high stock ownership dispersion in nations that impose legal limits on blockholders's clout to expropriate minority shareholder rights, and (b) high stock ownership concentration in nations that primarily rely on asset specificity as a form of investor protection. In this view, both the path-dependency and convergence theories complement each other in the broader context of corporate governance.

 

Our empirical analysis of international data suggests at least partial convergence toward the Berle-Means modern corporation with high stock ownership dispersion. It is thus plausible to infer the existence of path-dependent forces on corporate ownership concentration. Nevertheless, this result does not preclude the more dynamic form of functional convergence toward greater stock ownership dispersion through the general tendency of non-U.S. public firms to cross-list on the major U.S. stock exchanges. This trend introduces stringent disclosure and governance requirements to a wider set of multinational corporations. In essence, these empirical results suggest a case for the co-existence of the path-dependency and functional-convergence stories. These complementary stories arise as stable mates and represent some partial elements of truth in explaining the cross-country variation in corporate ownership and governance structures.

 

Blog+More

Netflix has an unsustainable business model in the meantime.

Becky Berkman

2019-05-02 13:30:00 Thursday ET

Netflix has an unsustainable business model in the meantime.

Netflix has an unsustainable business model in the meantime. Netflix maintains a small premium membership fee of $9-$14 per month for its unique collection

+See More

Carmen Reinhart and Kenneth Rogoff analyze long-run crisis data to find the root causes of financial crises for better bank capital regulation and asset market stabilization.

Laura Hermes

2023-06-28 09:29:00 Wednesday ET

Carmen Reinhart and Kenneth Rogoff analyze long-run crisis data to find the root causes of financial crises for better bank capital regulation and asset market stabilization.

Carmen Reinhart and Kenneth Rogoff delve into several centuries of cross-country crisis data to find the key root causes of financial crises for asset marke

+See More

Tim Berners-Lee suggests that several tech titans might need to be split up in response to some recent data breach and privacy concerns.

Chanel Holden

2018-11-09 11:35:00 Friday ET

Tim Berners-Lee suggests that several tech titans might need to be split up in response to some recent data breach and privacy concerns.

The Internet inventor Tim Berners-Lee suggests that several tech titans might need to be split up in response to some recent data breach and privacy concern

+See More

President Trump hails and touts America's new high real GDP economic growth in mid-2018.

Daisy Harvey

2018-07-25 11:41:00 Wednesday ET

President Trump hails and touts America's new high real GDP economic growth in mid-2018.

President Trump hails and touts America's new high real GDP economic growth in 2018Q2. The U.S. is now a $20+ trillion economy, and America hits this mi

+See More

Central banks learn to weigh the monetary policy trade-offs between output and inflation expectations and macro-financial stress conditions.

Becky Berkman

2026-01-31 10:31:00 Saturday ET

Central banks learn to weigh the monetary policy trade-offs between output and inflation expectations and macro-financial stress conditions.

  In recent years, several central banks conduct, assess, and discuss the core lessons, rules, and challenges from their monetary policy framework r

+See More

Mitch Anthony explains why it is important for sales leaders to apply sound social skills and emotional competences to fulfill customer needs, wants, demands, desires, and other preferences.

Jonah Whanau

2025-07-12 11:35:00 Saturday ET

Mitch Anthony explains why it is important for sales leaders to apply sound social skills and emotional competences to fulfill customer needs, wants, demands, desires, and other preferences.

Mitch Anthony explains why it is now more important for top sales leaders to apply social skills and emotional competences to fulfill customer needs, wants,

+See More