Investor protection and corporate control

Borja Larrain (), Matias Tapia and Francisco Urzúa I.
Authors registered in the RePEc Author Service: Francisco Urzúa I.

Journal of Corporate Finance, 2017, vol. 47, issue C, 174-190

Abstract: We argue that investor protection changes the relative importance of productivity and scale as drivers of corporate control transfers. Using a large sample of European firms we find that control transfers are more correlated with increasing profitability and less correlated with increasing size when investor protection is strong. This suggests that improving productivity is more important as a driver of acquisitions when investor protection is strong, and alleviating financial constraints or empire building are more important when investor protection is weak. Our evidence is consistent with the idea that good investor protection promotes a more productive use of corporate assets.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0929119917302262
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Investor Protection and Corporate Control (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:47:y:2017:i:c:p:174-190

DOI: 10.1016/j.jcorpfin.2017.09.002

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().