Cross-Ownership Among Firms: Some Determinants of the Separation of Ownership from Control

Klaus Ritzberger and Jamsheed Shorish

No 113, Economics Series from Institute for Advanced Studies

Abstract: This paper demonstrates that the current literature on cross-ownership among firms underestimates the true degree of separation between cash flow rights and voting rights. We use accounting identities to define coefficients of control, such that any (direct or indirect) control of a firm may be identified using these coefficients. This procedure is sufficient to show that under cross-ownership the voting rights associated with ownership are typically underestimated. We demonstrate by example that control and ownership of dividend rights may be entirely separated, and that multiple equilibria may exist in economies with cross ownership.

Keywords: Cross-ownership; Ownership and control; Corporate governance (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2002-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://irihs.ihs.ac.at/id/eprint/1415 First version, 2002 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ihs:ihsesp:113

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