Large Shareholders and Corporate Control
1986/06/01 by Andrei Shleifer, Robert W. Vishny · 8,629 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Accounting #Business #Control (management) #Corporate Finance and Governance #Corporate Taxation and Avoidance #Corporate action #Corporate governance #Corporation #Dividend #Economic Policies and Impacts #Economics #Finance #Management #Proxy (statistics) #Shareholder #Stock (firearms) #Tender offer
paper · doi:10.1086/261385
published in Journal of Political Economy 94(3, Part 1), 461-488 (University of Chicago Press)
openalex publication_date 1986/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/06
Abstract
In a corporation with many small owners, it may not pay any one of them to monitor the performance of the management. We explore a model in which the presence of a large minority shareholder provides a partial solution to this free-rider problem. The model sheds light on the following questions: Under what circumstances will we observe a tender offer as opposed to a proxy fight or an internal management shake-up? How strong are the forces pushing toward increasing concentration of ownership of a diffusely held firm? Why do corporate and personal investors commonly hold stock in the same firm, despite their disparate tax preferences?
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