It is the purpose of this paper to examine to what extent ownership structure can alleviate the agency problem and limit managerial expropriation of small shareholders. Since stock options and other forms of equity are frequently used as compensation for managers, special emphasis is placed on the question of how managerial ownership can affect agency costs and firm value. To evaluate the impact of ownership patterns on shareholder value, this paper surveys and reinterprets scientific advances in the corporate governance literature. A significant part of the analysis covers the interrelation of inside ownership, corporate policies, and shareholder value; as well as the role of endogeneity.
I Table of Contents
II List of Figures
1 Introduction
2 Agency problem and shareholder protection
2.1 The scope of managerial discretion
2.2 Concentrated ownership
2.3 Legal shareholder protection around the world
3 Inside ownership and firm valuation
3.1 Managerial incentive alignment and entrenchment
3.2 Empirical analyses with basic regression models
3.3 Model expansion, intermediates, and endogeneity issues
3.3.1 Investment policy
3.3.2 Leverage policy
3.3.3 Dividend policy
3.3.4 Determinants of managerial ownership and unobserved firm heterogeneity
4 Conclusion
5 References
- Quote paper
- Marco Klapper (Author), 2012, Ownership Structure and Investor Protection, Munich, GRIN Verlag, https://www.grin.com/document/196274
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