The DOI matches its Crossref record; 9 of the 9 references it cites were found in a registry or an index.
Investor Protection, Ownership, and the Cost of Capital
Open accessAbstract
Himmelberg, Hubbard, and Love combine the agency theory of the firm with risk diversification incentives for insiders. Principal-agent problems between insiders and outsiders force insiders to retain a larger share in their firm than they would under a perfect risk diversification strategy. The authors predict that this higher share of insider ownership and the resulting exposure of insiders to higher idiosyncratic risk will result in underinvestment and higher cost of capital. Using firm-level data from 38 countries, the authors provide evidence in support of their theoretical model, showing that the premium for bearing idiosyncratic risk varies between zero and six percent and decreases in the level of outside investor protection. The results of the study imply that policies aimed at strengthening investor protection laws and their enforcement will improve capital allocation and result in higher growth. This paper—a product of Finance, Development Research Group—is part of a larger effort in the group to study corporate governance and access to finance. The authors may be contacted at cph15@columbia.edu or ilove@worldbank.org
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cites
Coase, R. H. (1960) · The Journal of Law and Economics · doi:10.1086/466560 · Cited by 18,255
La Porta, R., Lopez‐de‐Silanes, F., Shleifer, A., & Vishny, R. W. (1998) · Journal of Political Economy · doi:10.1086/250042 · Cited by 18,025
A Survey of Corporate Governance
Shleifer, A., & Vishny, R. W. (1997) · The Journal of Finance · doi:10.1111/j.1540-6261.1997.tb04820.x · Cited by 16,243
Legal Determinants of External Finance
LA PORTA, R., LOPEZ‐DE‐SILANES, F., SHLEIFER, A., & VISHNY, R. W. (1997) · The Journal of Finance · doi:10.1111/j.1540-6261.1997.tb02727.x · Cited by 9,783
Investor protection and corporate governance
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (2000) · Journal of Financial Economics · doi:10.1016/s0304-405x(00)00065-9 · Cited by 6,848
The separation of ownership and control in East Asian Corporations
Claessens, S., Djankov, S., & Lang, L. H. P. (2000) · Journal of Financial Economics · doi:10.1016/s0304-405x(00)00067-2 · Cited by 5,754
Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure
Jensen (Deceased), M. C., & Meckling, W. H. (1998) · doi:10.2139/ssrn.94043 · Cited by 2,749
Managerial control of voting rights
Stulz, R. (1988) · Journal of Financial Economics · doi:10.1016/0304-405x(88)90039-6 · Cited by 2,429
Investor protection and equity markets
Shleifer, A., & Wolfenzon, D. (2002) · Journal of Financial Economics · doi:10.1016/s0304-405x(02)00149-6 · Cited by 1,077
Cited by
Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach
Smets, F., & Wouters, R. (2007) · SSRN Electronic Journal · doi:10.2139/ssrn.1687574 · Cited by 1,506
HAIL, L., & LEUZ, C. (2006) · Journal of Accounting Research · doi:10.1111/j.1475-679x.2006.00209.x · Cited by 1,371
The dynamics of trade and competition
Chen, N., Imbs, J., & Scott, A. (2009) · Journal of International Economics · doi:10.1016/j.jinteco.2008.10.003 · Cited by 358
Corporate social responsibility, investor protection, and cost of equity: A cross-country comparison
Breuer, W., Müller, T., Rosenbach, D., & Salzmann, A. (2018) · Journal of Banking & Finance · doi:10.1016/j.jbankfin.2018.07.018 · Cited by 350
Chen, K. C. W., Chen, Z., & Wei, K. C. J. (2011) · Journal of Financial and Quantitative Analysis · doi:10.1017/s0022109010000591 · Cited by 305
Metadata
- Authors
- Himmelberg, C. P., Hubbard, R. G., & Love, I.
- Venue
- World Bank, Washington, DC eBooks
- Publisher
- World Bank, Washington, D.C.
- Published
- 2002-04
- OpenAlex
- W2099716249
- Cited by
- 293
- References
- 9
- Type
- report
- Language
- en
- Open access
- green
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
How to cite
Cite CoChat for the checks on this page, and the paper for its own findings.
- This page
- CoChat. (2026). Citation check: Investor Protection, Ownership, and the Cost of Capital. https://app.cochat.ai/papers/10.1596/1813-9450-2834
- The paper
- Himmelberg, C. P., Hubbard, R. G., & Love, I. (2002). Investor Protection, Ownership, and the Cost of Capital. World Bank, Washington, DC eBooks. https://doi.org/10.1596/1813-9450-2834
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
