Quotation Gelter, Martin. 2008. Corporate Governance, Corporate and Employment Law, and the Costs of Expropriation. 2008 Meetings of the Canadian Law and Economics Association, University of Toronto, University of Toronto, Kanada, 26.09.


RIS


BibTeX

Abstract

On the one hand, minority share-holders are subject to a risk of being expropriated by the controller of the firm, i.e. either entrenched management under a dispersed ownership structure or a controlling share-holder under concentrated ownership. On the other hand, economic theory has increasingly begun to recognize the role of employees and other "nonshareholder constituencies" during the past years. While potential shareholders may be reluctant to invest if they are adequately protected against private benefits of control, stakeholders may be deterred from investing if they are subject to the risk of ex post opportunism (e.g. holdup). Our model studies the interaction of these two aspects of corporate governance by looking at the incentives that influence the decision by the controller of the firm (either a controlling shareholder or manager) to divert resources from (other) shareholders and employees. We analyze how these incentives vary between firms depending on the corporate governance structure and the degree of protection granted by the law.

Tags

Press 'enter' for creating the tag

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title Corporate Governance, Corporate and Employment Law, and the Costs of Expropriation
Event 2008 Meetings of the Canadian Law and Economics Association, University of Toronto
Year 2008
Date 26.09
Country Canada
Location University of Toronto

Associations

Projects
Shareholder and Stakeholder Orientation in Corporate Covernance and Corporate Law
People
Gelter, Martin (Former researcher)
Organization
Business Law II (Mock) AB (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5300 Economics (Details)
Google Scholar: Search