Corporate Control and Majority Positions
Cuadernos Economicos de ICE, 1992
This essay addresses some salient issues associated with corporate control. First, what determines the distribution of insider and outsider share ownership in the firm, and how does this distribution affect corporate performance? Second, how effective are board dismissals, proxy fights and takeovers as alternative corporate control mechanisms? Third, how do these alternative mechanisms interact, and what are the resulting incentives for boards of directors, managers, and takeover bidders? Fourth, do takeovers change underlying value, or do they merely redistribute wealth between affected parties? Finally, what explains the changes in supervision by boards of directors and through takeovers that occur over time?