Corporate Ownership and Control: A New Look at the Evidence of Berle and Means.

The empirical findings of the classic study of the separation of ownership and control by A. A. Berle and G. C. Means (still authorita tive after more than fifty years) are reappraised. A probabilistic vo ting model is used to define rigorously minority ownership control an d a rule for determining control type. For the sixteen companies whic h Berle and Means classified as management controlled, the rule varie s with shareholding concentration and differs substantially from that used by them. A direct application leaves the control classification s unchanged but the possibility of controlling coalitions of large sh areholders is demonstrated. The separation thesis is shown not to be well supported by the data. Copyright 1987 by Royal Economic Society.