The Effects of Legal Reforms on the Ownership Structure of Listed Companies

Cuomo, Francesca, Zattoni, Alessandro and Valentini, Giovanni (2013) The Effects of Legal Reforms on the Ownership Structure of Listed Companies. Industrial and Corporate Change, 22 (2). pp. 427-458. ISSN 0960-6491

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Abstract

A general view in the corporate governance literature is that corporate ownership structures are rather stable in time and change slowly. However, even if changes in ownership structures are difficult due to path dependence, anecdotal evidence indicates that some sort of transition towards the US style corporate ownership could be occurring in civil-law countries. The aim of this article is to test the so-called “law and finance” view, which predicts that this convergence will only happen if the appropriate regulatory framework is in place. We test this prediction using longitudinal data from Italian listed companies, assessing the effects of recent legal reforms. Our results show that an increase in the protection of investors’ rights is associated with a lower use of control enhancing mechanisms and a lower separation of control and cash flow rights, while it is less evident if it is associated with a more dispersed ownership. These findings carry important implications for theory and practice.

Item Type: Article
Uncontrolled Keywords: corporate strategy,governance approach,industrial performance,legal system,ownership,united states
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Depositing User: Elle Green
Date Deposited: 11 Jul 2012 11:50
Last Modified: 21 Apr 2020 16:19
URI: https://ueaeprints.uea.ac.uk/id/eprint/39145
DOI: 10.1093/icc/dts015

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