This paper presents an analytical framework from which it can be inferred whether sellers or buyers in corporate control transactions value private benefits highest. I am thus able to suggest an answer to the question: Are blocks of shares traded because the buyer is a more efficient monitor...

This paper studies how large shareholders with bene…ts of control a¤ect …rms’ equity issue behavior and investment decisions. I introduce an explicit agency cost structure based on the large shareholder’s bene…ts of control. In a simple extension of Myers and Majluf [1984], I show...