Investor Protection and Corporate Valuation

Rafael La Porta, Florencio Lopez-de-Silanes (), Andrei Shleifer and Robert Vishny

No 7403, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a model of the effects of legal protection of minority shareholders and of cash flow ownership by a controlling shareholder on the valuation of firms. We then test this model using a sample of 371 large firms from 27 wealthy economies. Consistent with the model, we find evidence of higher valuation of firms in countries with better protection of minority shareholders, and weaker evidence of the benefits of higher cash flow ownership by controlling shareholders for corporate valuation.

JEL-codes: G31 G32 (search for similar items in EconPapers)
Date: 1999-10
New Economics Papers: this item is included in nep-cfn, nep-fin and nep-ind
Note: AP CF
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Citations: View citations in EconPapers (75)

Published as Rafael La porta & Florencio Lopez-De-Silanes & Andrei Shleifer & Robert Vishny, 2002. "Investor Protection and Corporate Valuation," Journal of Finance, American Finance Association, vol. 57(3), pages 1147-1170, 06.

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Journal Article: Investor Protection and Corporate Valuation (2002)
Working Paper: Investor Protection and Corporate Valuation (2002)
Working Paper: Investor Protection and Corporate Valuation (1999)
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