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 cash...

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Autores Principales: Gutiérrez, L.H., Pombo, C.
Formato: Artículo (Article)
Lenguaje:Inglés (English)
Publicado: 2020
Materias:
Acceso en línea:http://hdl.handle.net/1992/46800
id ir-1992-46800
recordtype dspace
spelling ir-1992-468002020-11-04T20:23:08Z Corporate Ownership and Control Contestability in Emerging Markets: the Case of Colombia Gutiérrez, L.H. Pombo, C. Corporate control Multiple blockholders Corporate governance Firm value Colombian corporations 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. 2020-10-01T16:45:46Z 2020-10-01T16:45:46Z 2009 article publishedVersion http://hdl.handle.net/1992/46800 https://www.sciencedirect.com/science/article/pii/S0148619508000118 eng openAccess application/pdf instname:Universidad de los Andes reponame:Repositorio Institucional Séneca
institution Universidad de los Andes
collection DSpace
language Inglés (English)
topic Corporate control
Multiple blockholders
Corporate governance
Firm value
Colombian corporations
spellingShingle Corporate control
Multiple blockholders
Corporate governance
Firm value
Colombian corporations
Gutiérrez, L.H.
Pombo, C.
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.
format Artículo (Article)
author Gutiérrez, L.H.
Pombo, C.
author_facet Gutiérrez, L.H.
Pombo, C.
author_sort Gutiérrez, L.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 2020
url http://hdl.handle.net/1992/46800
_version_ 1705934398639046656
score 12,131701