We consider a mean-variance general equilibrium economy where the expected returns for controlling and non-controlling shareholders are different because the former are able to divert a fraction of the profits. We find that when investor protection is poor, asset return correlation affects...

We consider a mean-variance general equilibrium economy where the expected returns for controlling and non-controlling shareholders are different because the former are able to divert a fraction of the profits. We find that when investor protection is poor, asset return correlation affects...

In recent years, globalization of capital flows has lead to the growing relevance of "Emerging Capital Markets". In particular, India is one of the countries with an expanding stock market that has started attracting foreign funds. The Indian capital market has grown phenomenally due to the...