Corporate ownership and control contestability in emerging markets: The case of Colombia
This study examines the structure of voting control and blockholders' contestability for a sample of 233 non-financial listed firms in Colombia during 1996-2004. Corporate control is characterized by high ownership concentration and blockholder power, which implies low separation ratios between...
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Acceso en línea: | https://repository.urosario.edu.co/handle/10336/22338 https://doi.org/10.1016/j.jeconbus.2008.01.002 |
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ir-10336-223382022-05-02T12:37:16Z Corporate ownership and control contestability in emerging markets: The case of Colombia Gutiérrez, Luis H. Pombo, Carlos Colombian corporations Corporate control Corporate governance Firm value Multiple blockholders This study examines the structure of voting control and blockholders' contestability for a sample of 233 non-financial listed firms in Colombia during 1996-2004. Corporate control is characterized by high ownership concentration and blockholder power, which implies low separation ratios between cash flow rights and voting rights. On average the separation ratios for the largest voting block is 0.95, while that for the fourth largest shareholder is 0.75. Corporate control is privately biased when there is direct monitoring of firm management by controlling owners. Regression results show that a more equal distribution of equity among large blockholders has a positive effect on firm value. Contestability matters most when firm shares are liquid and actively traded on the stock market. This finding is reinforced when the probability that the largest block can form a winning coalition decreases and performance variables, such as market to sales ratio and return on equity, are included in the estimating equations as substitutes for firm value. In addition, our estimations provide evidence that diversion of rents (tunneling) is limited by blockholders' contestability. © 2008 Elsevier Inc. All rights reserved. 2009 2020-05-25T23:56:09Z info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion 1486195 https://repository.urosario.edu.co/handle/10336/22338 https://doi.org/10.1016/j.jeconbus.2008.01.002 eng info:eu-repo/semantics/openAccess application/pdf instname:Universidad del Rosario |
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EdocUR - Universidad del Rosario |
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language |
Inglés (English) |
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Colombian corporations Corporate control Corporate governance Firm value Multiple blockholders |
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Colombian corporations Corporate control Corporate governance Firm value Multiple blockholders Gutiérrez, Luis H. Pombo, Carlos Corporate ownership and control contestability in emerging markets: The case of Colombia |
description |
This study examines the structure of voting control and blockholders' contestability for a sample of 233 non-financial listed firms in Colombia during 1996-2004. Corporate control is characterized by high ownership concentration and blockholder power, which implies low separation ratios between cash flow rights and voting rights. On average the separation ratios for the largest voting block is 0.95, while that for the fourth largest shareholder is 0.75. Corporate control is privately biased when there is direct monitoring of firm management by controlling owners. Regression results show that a more equal distribution of equity among large blockholders has a positive effect on firm value. Contestability matters most when firm shares are liquid and actively traded on the stock market. This finding is reinforced when the probability that the largest block can form a winning coalition decreases and performance variables, such as market to sales ratio and return on equity, are included in the estimating equations as substitutes for firm value. In addition, our estimations provide evidence that diversion of rents (tunneling) is limited by blockholders' contestability. © 2008 Elsevier Inc. All rights reserved. |
format |
Artículo (Article) |
author |
Gutiérrez, Luis H. Pombo, Carlos |
author_facet |
Gutiérrez, Luis H. Pombo, Carlos |
author_sort |
Gutiérrez, Luis H. |
title |
Corporate ownership and control contestability in emerging markets: The case of Colombia |
title_short |
Corporate ownership and control contestability in emerging markets: The case of Colombia |
title_full |
Corporate ownership and control contestability in emerging markets: The case of Colombia |
title_fullStr |
Corporate ownership and control contestability in emerging markets: The case of Colombia |
title_full_unstemmed |
Corporate ownership and control contestability in emerging markets: The case of Colombia |
title_sort |
corporate ownership and control contestability in emerging markets: the case of colombia |
publishDate |
2009 |
url |
https://repository.urosario.edu.co/handle/10336/22338 https://doi.org/10.1016/j.jeconbus.2008.01.002 |
_version_ |
1740172934605963264 |
score |
12,131701 |