Corporate Ownership and Control Contestability in Emerging Markets: the Case of Colombia

This paper studies the structure of voting control and block holders' contestability in Colombia for a sample of 233 non-financial listed firms during 1996-2004 period. Corporate control is characterized by high ownership concentration and block holder power, which implies low separation ratios...

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Autores:
Gutiérrez Ramírez, Luis Hernando
Pombo Vejarano, Carlos
Tipo de recurso:
Work document
Fecha de publicación:
2007
Institución:
Universidad de los Andes
Repositorio:
Séneca: repositorio Uniandes
Idioma:
spa
OAI Identifier:
oai:repositorio.uniandes.edu.co:1992/46382
Acceso en línea:
http://hdl.handle.net/1992/46382
Palabra clave:
Corporate control
Multiple blockholders
Corporate governance
Firm value
Colombian corporations
Corporaciones - Valoración - Modelos econométricos
Accionistas - Investigaciones - Colombia
Mercados emergentes - Estudio de casos
Administración
Rights
openAccess
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
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oai_identifier_str oai:repositorio.uniandes.edu.co:1992/46382
network_acronym_str UNIANDES2
network_name_str Séneca: repositorio Uniandes
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dc.title.none.fl_str_mv Corporate Ownership and Control Contestability in Emerging Markets: the Case of Colombia
dc.title.alternative.none.fl_str_mv Control corporativo en presencia de múltiples grandes accionistas en mercados emergentes: el caso de 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
Corporate control
Multiple blockholders
Corporate governance
Firm value
Colombian corporations
Corporaciones - Valoración - Modelos econométricos
Accionistas - Investigaciones - Colombia
Mercados emergentes - Estudio de casos
Administración
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.creator.fl_str_mv Gutiérrez Ramírez, Luis Hernando
Pombo Vejarano, Carlos
dc.contributor.author.none.fl_str_mv Gutiérrez Ramírez, Luis Hernando
Pombo Vejarano, Carlos
dc.subject.keyword.none.fl_str_mv Corporate control
Multiple blockholders
Corporate governance
Firm value
Colombian corporations
topic Corporate control
Multiple blockholders
Corporate governance
Firm value
Colombian corporations
Corporaciones - Valoración - Modelos econométricos
Accionistas - Investigaciones - Colombia
Mercados emergentes - Estudio de casos
Administración
dc.subject.armarc.none.fl_str_mv Corporaciones - Valoración - Modelos econométricos
Accionistas - Investigaciones - Colombia
Mercados emergentes - Estudio de casos
dc.subject.themes.none.fl_str_mv Administración
description This paper studies the structure of voting control and block holders' contestability in Colombia for a sample of 233 non-financial listed firms during 1996-2004 period. Corporate control is characterized by high ownership concentration and block holder 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 for the fourth largest shareholder it is 0.80. Corporate control is privately biased when there is direct monitoring between controlling owners and firm management. Regression results show that a more equal distribution of equity among large block holders leads to a positive effect on firm value. Contestability matters most when firm shares are liquid and highly traded on the stock market. This finding is reinforced when the probability of forming a winning coalition by the largest block decreases and when performance variables, such as market to sales ratio and return on equity, are included in the estimating equations as substitutes of firm value. In addition, our estimations provide evidence that diversion of rents is limited by block holders' contestability and there is no effective tunneling.
publishDate 2007
dc.date.issued.none.fl_str_mv 2007
dc.date.accessioned.none.fl_str_mv 2020-09-21T15:19:01Z
dc.date.available.none.fl_str_mv 2020-09-21T15:19:01Z
dc.type.spa.fl_str_mv Documento de trabajo
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dc.identifier.uri.none.fl_str_mv http://hdl.handle.net/1992/46382
dc.identifier.instname.spa.fl_str_mv instname:Universidad de los Andes
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url http://hdl.handle.net/1992/46382
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dc.relation.ispartofseries.none.fl_str_mv Galeras de Administración, No. 16
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dc.format.extent.none.fl_str_mv 24 páginas
dc.format.mimetype.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Universidad de los Andes
dc.publisher.faculty.none.fl_str_mv Facultad de Administración
publisher.none.fl_str_mv Universidad de los Andes
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spelling Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores.http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2Gutiérrez Ramírez, Luis Hernando0582fb5e-ad8a-4f62-acc0-2b2e18abe657600Pombo Vejarano, Carlos98856002020-09-21T15:19:01Z2020-09-21T15:19:01Z20071900-1606http://hdl.handle.net/1992/46382instname:Universidad de los Andesreponame:Repositorio Institucional Sénecarepourl:https://repositorio.uniandes.edu.co/This paper studies the structure of voting control and block holders' contestability in Colombia for a sample of 233 non-financial listed firms during 1996-2004 period. Corporate control is characterized by high ownership concentration and block holder 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 for the fourth largest shareholder it is 0.80. Corporate control is privately biased when there is direct monitoring between controlling owners and firm management. Regression results show that a more equal distribution of equity among large block holders leads to a positive effect on firm value. Contestability matters most when firm shares are liquid and highly traded on the stock market. This finding is reinforced when the probability of forming a winning coalition by the largest block decreases and when performance variables, such as market to sales ratio and return on equity, are included in the estimating equations as substitutes of firm value. In addition, our estimations provide evidence that diversion of rents is limited by block holders' contestability and there is no effective tunneling.Este artículo estudia la estructura de votación y con-trol entre los primeros cuatro bloques de votación en Colombia para una muestra de 233 empresas públicas por acciones que estuvieron listadas en bolsa durante el período 1996-2004. El control corporativo está caracterizado por una alta concentración y poder de votación entre los grandes accionistas, lo que implica que existan bajas razones de separación entre los derechos de flujo de caja o propiedad directa con los derechos totales de votación dada por la propiedad integrada. En promedio la razón de separación para el primer bloque de votación es de 0.95, mientras que para el cuarto bloque de votación es de 0.80. El control corporativo sigue un sesgo privado cuando hay un monitoreo directo entre los accionistas controlantes con las gerencias. Los resultados econométricos muestran que entre más igualitario sea el poder de votación entre los principales bloques conlleva a un efecto positivo sobre la valoración de la firma. Este control interno entre los bloques se hace más evidente cuando las acciones transadas de las empresas son de alta y mediana bursatilidad. Este resultado se refuerza cuando la probabilidad de la formación de una coalición dominante por parte del primer bloque de votación disminuye y cuando se incluyen variables de desempeño en las regresiones. Más aún, nuestras estimaciones proveen evidencia que la extracción de rentas es limitada por este control interno entre los bloques de votación y la transferencia de rentas a otras empresas (tunneling) no es efectivo.1. Introduction. 2. Literature on control contestability. 3. Data and Sample Selection. 4. Corporate Control. 5. Econometric Analysis. 6. Conclusions. References.24 páginasapplication/pdfspaUniversidad de los AndesFacultad de AdministraciónGaleras de Administración, No. 16instname:Universidad de los Andesreponame:Repositorio Institucional SénecaCorporate Ownership and Control Contestability in Emerging Markets: the Case of ColombiaControl corporativo en presencia de múltiples grandes accionistas en mercados emergentes: el caso de ColombiaDocumento de trabajoinfo:eu-repo/semantics/workingPaperhttp://purl.org/coar/resource_type/c_8042http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttps://purl.org/redcol/resource_type/WPCorporate controlMultiple blockholdersCorporate governanceFirm valueColombian corporationsCorporaciones - Valoración - Modelos econométricosAccionistas - Investigaciones - ColombiaMercados emergentes - Estudio de casosAdministraciónFacultad de AdministraciónPublicationORIGINALGaleras-de-administración-16.pdfGaleras-de-administración-16.pdfapplication/pdf2668693https://repositorio.uniandes.edu.co/bitstreams/42a7836a-e5a9-4648-adc9-a0d74cc92e43/downloada77787d0ce5b7b576d4f6d478947d078MD51TEXTGaleras-de-administración-16.pdf.txtGaleras-de-administración-16.pdf.txtExtracted texttext/plain86169https://repositorio.uniandes.edu.co/bitstreams/d7cebec5-27d2-4841-9e42-f5ce59aea5f7/download524726048f9c112558f7b04b8312ec7aMD54THUMBNAILGaleras-de-administración-16.pdf.jpgGaleras-de-administración-16.pdf.jpgIM Thumbnailimage/jpeg7264https://repositorio.uniandes.edu.co/bitstreams/a2dd5cae-f8d2-42cb-86e8-e25413774b98/download6f3bfd13370287691a97bb240cd7696dMD551992/46382oai:repositorio.uniandes.edu.co:1992/463822023-10-10 16:23:19.32http://creativecommons.org/licenses/by-nc-nd/4.0/open.accesshttps://repositorio.uniandes.edu.coRepositorio institucional Sénecaadminrepositorio@uniandes.edu.co