Work

Investor Protection and Corporate Valuation

Year: 1999

Type: report

Abstract: We present a model of the effects of legal protection of minority shareholders and of cash flow ownership by a controlling shareholder on the valuation of firms. We then test this model using a sample of 371 large firms from 27 wealthy economies. Consistent with the model, we find evidence of higher valuation of firms in countries with better protection of minority shareholders, and weaker evidence of the benefits of higher cash flow ownership by controlling shareholders for corporate valuation.

Source: National Bureau of Economic Research

DOI: 10.3386/w7403

Authors: Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, Robert Vishny

Institutions: National Bureau of Economic Research, Harvard University, University of Chicago

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

OpenAlex ID: W2902126333

Cites:

Cited by: 195

Related to: 10