Investor Protection and Corporate Ownership Concentration: Evidence from U.S. Companies

10.6293/AQAFA.2012.10.07

Bao-Zhi Qu

Ownership Concentration ； Investor Protection ； Corporate Governance

Advances in Quantitative Analysis of Finance and Accounting

10期（2012 / 06 / 01）

161 - 192

英文

The main purpose of this paper is to study the determination of corporate ownership concentration in a context in which investor protection is imperfect so tunneling may exist. This paper extends Demsetz and Lehn's (1985) classical study to investigate the determination of corporate ownership concentration and its relation to investor protection using a within-country setting. Consistent with the theoretical predictions of a simple model, the study finds strong empirical evidence that corporate ownership concentration is negatively related to the effectiveness of law enforcement within a state using a data set of 3,230 U.S. public companies over a 10-year period (1992-2002). Ownership concentration also varies systematically with firm fundamentals such as firm return, return volatility, and firm size.

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