Quotation Ecchia, Giulio, Gelter, Martin, Pasotti, Piero. 2009. Corporate Governance, Corporate and Employment Law, and the Costs of Expropriation. ECGI - Law Working Paper No. 128/2009; Harvard Olin Fellows' Discussion Paper No. 29, 5/2009.


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Abstract

We set up a model to study how ownership structure, corporate law and employment law interact to set the incentives that influence the decision by the large shareholder or manager effectively controlling the firm to divert resources from minority shareholders and employees. We suggest that agency problems between the controller and other investors and holdup problems between shareholders and employees are connected if the controller bears private costs of 'expropriating' these groups. Corporate law and employment law may therefore somethimes be substitutes; employees may benefit from better corporate law intended to protect minority shareholder, and vice versa. Our model has implications for the domestic and comparative study of corporate governance structure and addresses, among other things, the question whether large shareholders are better able to 'bond' with employees than dispersed ones, or whether the separation of ownership facilitates longterm relationships with labor.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Corporate Governance, Corporate and Employment Law, and the Costs of Expropriation
Title of whole publication ECGI - Law Working Paper No. 128/2009; Harvard Olin Fellows' Discussion Paper No. 29, 5/2009
Year 2009
URL http://ssrn.com/abstract=1430623

Associations

Projects
Shareholder and Stakeholder Orientation in Corporate Covernance and Corporate Law
People
Gelter, Martin (Former researcher)
External
Ecchia, Giulio (University of Bologna, Italy)
Pasotti, Piero (University of Bologna, Italy)
Organization
Business Law II (Mock) AB (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5203 Labour law (Details)
5208 Company law (Details)
5300 Economics (Details)
5361 Financial management (Details)
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