PRIVATE BENEFITS: OWNERSHIP VERSUS CONTROL

Joon Ho Hwang and Bill Hu

Journal of Financial Research, 2009, vol. 32, issue 4, 365-393

Abstract: We empirically decompose private benefits into benefits accruing from ownership and benefits accruing from control. We document that private benefits increase slowly with respect to the ownership level but increase rapidly with respect to the blockholder's likelihood of exercising control. The decomposition of private benefits allows us to quantify the magnitude of nonpecuniary private benefits by examining the block premium when the blockholder's likelihood of exercising control is close to zero. We find that the size of nonpecuniary private benefits ranges from 0.61% to 5.92% of the share price, or 18% to 29% of the total private benefits.

Date: 2009
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https://doi.org/10.1111/j.1475-6803.2009.01254.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jfnres:v:32:y:2009:i:4:p:365-393

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