Control consolidation with a threshold: An algorithm

Ariane Chapelle () and Ariane Szafarz

No 06-007.RS, Working Papers CEB from Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB)

Abstract: Control tunnelling over firms can be reached through pyramids, cross-ownership, and other complex features. This phenomenon is frequent in Europe and in Asia. However, the theoretical literature has not yet converged toward a well-defined and robust measurement of integrated control that takes into account the threshold for control as applied in practice. Based on graph theory, this paper aims at filling this gap and proposes a new algorithm for evaluating the control tunnelling exerted by the firms' ultimate shareholders. Then, the paper discusses the various forms of control existing next to voting shares, like multiple voting rights, board representation and active monitoring, before suggesting ways to include them into the modelling of control.

Keywords: Ownership; Corporate control; ultimate shareholder. (search for similar items in EconPapers)
JEL-codes: G32 C67 L22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin and nep-sea
Date: 2006-05
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http://www.solvay.edu/EN/Research/Bernheim/documents/wp06007.pdf First version, 2006 (application/pdf)

Related works:
Working Paper: Control consolidation with a threshold: an algorithm
Working Paper: Control consolidation with a threshold: an algorithm (2006)
Working Paper: Control consolidation with a threshold: an algorithm (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:sol:wpaper:06-007

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