Vital in preserving managerial accountability, the firmly established one share, one vote rule provides shareholders with limited rights to elect directors who appoint managers and to approve certain extraordinary transactions. Without the deterrents of risk of capital loss and fear of removal,...

I examine whether the Securities and Exchange Commission (SEC) in the US is a learning organization (i.e., one that is capable of learning and adaptation to the dynamic nature of the securities markets – the subject of the SEC's regulatory oversight). Using the treatment of public corporate...

This paper analyzes the legal rules governing the sale of corporate control in the specific case of going private transactions and examines whether a controlling shareholder must share the premium associated with a sale-of-control. The paper is based on the framework developed in Bebchuk (1994)...

This paper compares the extent of common ownership in the US and the EU stock markets, with a particular focus on differences in the ap-plicable ownership transparency requirements. Most empirical research on common ownership to date has focused on US issuers, largely relying on ownership data...

Azar, Schmalz, and Tecu (2018, “AST”) purport to show a positive relationship between ticket prices and common ownership in the U.S. airline industry. We replicate AST's results and show that their conclusion is a result of incorrect and unsubstantiated assumptions about:(1) financial...

Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that substantial horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete...

We present a simple model of common ownership in which an investor chooses its stake in competing firms in light of the effects on firm behavior and firm profits. Two firms compete in Cournot duopoly, and ownership affects a firm’s objective function in the manner posited by Bresnahan & Salop...

This paper proposes a theoretical model that incorporates corporate governance into the basic CAPM, where corporate governance affects the disutility of managerial effort and the possibility of managers to divert company resources. It shows that corporate governance affects firms’ stock...

On the premise that the expropriation of corporate assets by controlling shareholders would generate a residual loss, we studied how the laws of investor protection influenced on the decentralization of corporate ownership and what role the litigation cost play in this story by continuous time...