Ownership Structure Metrics

It is the task of ownership structure metrics to transform a shareholder structure into figures which represent the power structure among the shareholders. The ownership structure of a corporation is multidimensional. Of the horizontal levels, two are of major interest: the first level of direct shareholders and the final level with ultimate shareholders. First and ultimate level may be the same but there could be a chain of shareholders between first and ultimate level as well. Both, the analyses of a shareholder chain and of a horizontal stage, have to answer the same question: What is the power structure at that particular chain link and on this specific horizontal level resp. like?This article consists of two parts: In the section on horizontal ownership structure metrics, we first substantiate the requirements the transformation of the shareholder structure into numbers should achieve. Then we present and recognize the concepts which can be found in the literature. Early empirical studies relied mainly on the formation of categories. Contemporary research generally rests on the largest voting rights bloc. We pay a great deal of attention to the comparatively new instrument of power indices. The second section of this article on vertical ownership structure metrics can be shorter because the problems and solutions in this area resemble very much those on the horizontal level.In conclusion, this article demonstrates the ability of power indices to express the power position of a certain shareholder subject to the remaining entirety of the shareholder structure in a single value. This feature lends power indices the potential to advance the field of ownership structure metrics, with an emphasis on vertical ownership structure metrics. But still a lot of theoretical and empirical work has to be done before power indices may become a common tool in corporate governance research. For empirical analyses, the power index variant applied to the investigation of a horizontal shareholder structure should be selected and calibrated on the basis of the particular dataset to be analyzed. As to vertical analyses, the advantage of power indices over their traditional competitors is - contrary to horizontal analyses - not clear, yet