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...

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Tipo de recurso:
Fecha de publicación:
2009
Institución:
Universidad del Rosario
Repositorio:
Repositorio EdocUR - U. Rosario
Idioma:
eng
OAI Identifier:
oai:repository.urosario.edu.co:10336/22338
Acceso en línea:
https://doi.org/10.1016/j.jeconbus.2008.01.002
https://repository.urosario.edu.co/handle/10336/22338
Palabra clave:
Colombian corporations
Corporate control
Corporate governance
Firm value
Multiple blockholders
Rights
License
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spelling 867059660068bbf3c4-0d2b-447b-b9e7-6197c032977e2020-05-25T23:56:09Z2020-05-25T23:56:09Z2009This 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. © 2008 Elsevier Inc. All rights reserved.application/pdfhttps://doi.org/10.1016/j.jeconbus.2008.01.0021486195https://repository.urosario.edu.co/handle/10336/22338eng139No. 2112Journal of Economics and BusinessVol. 61Journal of Economics and Business, ISSN:1486195, Vol.61, No.2 (2009); pp. 112-139https://www.scopus.com/inward/record.uri?eid=2-s2.0-58549098557&doi=10.1016%2fj.jeconbus.2008.01.002&partnerID=40&md5=50066a7c417b7e32055676a7eb51bbddAbierto (Texto Completo)http://purl.org/coar/access_right/c_abf2instname:Universidad del Rosarioreponame:Repositorio Institucional EdocURColombian corporationsCorporate controlCorporate governanceFirm valueMultiple blockholdersCorporate ownership and control contestability in emerging markets: The case of ColombiaarticleArtículohttp://purl.org/coar/version/c_970fb48d4fbd8a85http://purl.org/coar/resource_type/c_6501Gutiérrez Ramírez, Luis HernandoPombo, CarlosORIGINAL1-s2-0-S0148619508000118-main.pdfapplication/pdf564572https://repository.urosario.edu.co/bitstreams/66982356-643f-46ce-9eb9-4b3045d4ad6f/downloadc1677bc4d799379a4e1a72ec8f973862MD51TEXT1-s2-0-S0148619508000118-main.pdf.txt1-s2-0-S0148619508000118-main.pdf.txtExtracted texttext/plain85651https://repository.urosario.edu.co/bitstreams/47492a46-15ac-419b-90a8-0f5a8b8c8c83/download073cac10798a63a487296e9fedeebc8cMD52THUMBNAIL1-s2-0-S0148619508000118-main.pdf.jpg1-s2-0-S0148619508000118-main.pdf.jpgGenerated Thumbnailimage/jpeg4018https://repository.urosario.edu.co/bitstreams/512a1ae9-140c-42e7-a2fd-d7d8e8b470b5/download567c02ba81abf1c3d583cfc43b07607bMD5310336/22338oai:repository.urosario.edu.co:10336/223382022-05-02 07:37:16.719883https://repository.urosario.edu.coRepositorio institucional EdocURedocur@urosario.edu.co
dc.title.spa.fl_str_mv Corporate ownership and control contestability in emerging markets: The case of Colombia
title Corporate ownership and control contestability in emerging markets: The case of Colombia
spellingShingle Corporate ownership and control contestability in emerging markets: The case of Colombia
Colombian corporations
Corporate control
Corporate governance
Firm value
Multiple blockholders
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
dc.subject.keyword.spa.fl_str_mv Colombian corporations
Corporate control
Corporate governance
Firm value
Multiple blockholders
topic Colombian corporations
Corporate control
Corporate governance
Firm value
Multiple blockholders
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. © 2008 Elsevier Inc. All rights reserved.
publishDate 2009
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dc.type.eng.fl_str_mv article
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dc.identifier.issn.none.fl_str_mv 1486195
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https://repository.urosario.edu.co/handle/10336/22338
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dc.relation.citationIssue.none.fl_str_mv No. 2
dc.relation.citationStartPage.none.fl_str_mv 112
dc.relation.citationTitle.none.fl_str_mv Journal of Economics and Business
dc.relation.citationVolume.none.fl_str_mv Vol. 61
dc.relation.ispartof.spa.fl_str_mv Journal of Economics and Business, ISSN:1486195, Vol.61, No.2 (2009); pp. 112-139
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