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Cited by 8,408Corporate Finance and GovernanceMerger and Competition AnalysisFinancial Markets and Investment Strategies

Large Shareholders and Corporate Control

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Shleifer, Andrei, Vishny, Robert W.·1986·Journal of Political Economy
DOI 10.1086/261385
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Abstract

In a corporation with many small owners, it may not pay any one of them to monitor the performance of the management. We explore a model in which the presence of a large minority shareholder provides a partial solution to this free-rider problem. The model sheds light on the following questions: Under what circumstances will we observe a tender offer as opposed to a proxy fight or an internal management shake-up? How strong are the forces pushing toward increasing concentration of ownership of a diffusely held firm? Why do corporate and personal investors commonly hold stock in the same firm, despite their disparate tax preferences?

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Crossref · 10.1086/261385

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  • Large owners have greater incentives to acquire information and monitor managers than small shareholders.

    “Large owners have greater incentives to acquire information and monitor managers than small shareholders”

    From Finance, Growth, and Inequality (2021) · cites this paper as Shleifer and Vishny, 1986

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Authors
Shleifer, A., & Vishny, R. W.
ORCID
Vishny, Robert W.
Venue
Journal of Political Economy
Publisher
University of Chicago Press
Published
1986-06
Volume
94
Issue
3, Part 1
Pages
461-488
ISSN
  • 0022-3808 (ISSN-L)
  • 1537-534X
DOI
10.1086/261385
OpenAlex
W2135241016
Cited by
8,408
References
0
Citations by year
2026: 228 · 2025: 341 · 2024: 334 · 2023: 369 · 2022: 312 · 2021: 366 · 2020: 362 · 2019: 346 · 2018: 308 · 2017: 325 · 2016: 347 · 2015: 344 · 2014: 428 · 2013: 384 · 2012: 427
FWCI
80.24
Type
journal article
Language
en
Open access
Licence
cc-by
Locations
  • Journal of Political Economy (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • Digital Access to Scholarship at Harvard (DASH) (Harvard University) (submittedVersion, cc-by)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
Keywords
corporate control, free-rider problem, monitoring of management, tender offers, proxy fights, ownership concentration, corporate governance, personal investors, tax expenditures

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