Between family and friends: The choice of corporate ownership structure

  • Ramón A. Castillo Ponce Universidad Autónoma de Baja California & California State University, Los ́Angeles
Keywords: family firm, legal system, conflict theory
JEL Classification: G0, G3, L0, L2

Abstract

The document presents an analysis, developed under the framework of conflict theory, which models the choice of ownership structure as the result of a power struggle between the owner of a firm and potential shareholders. The theoretical model suggests that, when the system that protects property rights is inefficient, the choice of keeping the ownership of the firm within the family represents the strategy that provides the owner the highest value when going public.

References

Becker, G. (1968). Crime and Punishment: An Economic Approach, Journal of Political Economy, 76, 169-217.

Burkart, M., F. Panunzi y Andrei Shleifer (2003). Family Firms, Journal of Finance, 58, 2167-2200.

Burkart, M. y F. Panunzi (2001). Agency Conflicts, Ownership Concentration and Legal Shareholder Protection, Financial Markets Group, LSE Discussion Paper, 378.

Burkart, M., D. Gromb y F. Panunzi (1997). Large Shareholders, Monitoring, and the Value of the Firm, Quarterly Journal of Economics, 112, 693-728.

Castillo, R. y S. Skaperdas (2005). All in the Family or Public? Law and Appropriative Costs as Determinants of Ownership Structure, Economics of Governance, 93-104.

Clark, D. y Ch. Riis (1998). Contest Success Function: An Extension, Economic Theory, 11, 201-204.

Garfinkel, M. y S. Skaperdas (1996). The Political Economy of Conflict and Appropriation, Cambridge University Press.

Grossman, H. y M. Kim (1995). Swords or Plowshares? A Theory of the Security Claims to Property, Journal of Political Economy, 103, 1275-1288.

Hirshleifer, J. (1995). Anarchy and its Breakdown, Journal of Political Economy, 103, 26-52.

Hirshleifer, J. y E. Osborne (2001). Truth and the Legal Battle, Public Choice, 108, 169-195.

La Porta, R., et al. (1999). Corporate Ownership Around the World, Journal of Finance, 54, 471-517.

La Porta, R., et al. (1998). Law and Finance, Journal of Political Economy, 106, 1113-1155.

La Porta, R., et al. (1997). Legal Determinants of External Finance, Journal of Finance, 52, 1131-1150.

Milgrom, P. (1988). Employment Contracts, Influence Activities, and Efficient Organizational Design, Journal of Political Economy, 96, 42-61.

Pagano, M. y A. Röell (1998). The Choice of Stock Ownership Structure: Agency Costs, Monitoring, and the Decision to Go Public, Quarterly Journal of Economics, 113, 187-225.

Ritter, J. (1987). The Costs of Going Public, Journal of Financial Economics, 19, 269-281.

Shleifer, A. y D. Wolfenzon (2002). Investor Protection and Equity Markets, Journal of Financial Economics, 66, 3-27.

Shleifer, A. y R. W. Vishny (1997). A Survey of Corporate Governance, Journal of Finance, 52, 737-783.

Skaperdas, S. (1996). Contest Success Functions, Economic Theory, 7, 283-290.

Solari, A. E. (1976). Teoría, acción social y desarrollo en América Latina, Siglo Veintiuno Editores.

Zingales, L. (1995). Insider Ownership and the Decision to Go Public, Review of Economic Studies, 425-448.

Published
01-01-2007
How to Cite
Castillo PonceR. (2007). Between family and friends: The choice of corporate ownership structure. Estudios Económicos, 22(1), 3-18. https://doi.org/10.24201/ee.v22i1.150
  • Abstract viewed - 180 times
  • PDF (Spanish) downloaded - 91 times