Arbeitspapier
The Political Economy of Dominant Investors
We allow the preference of a political majority to determine boththe corporate governance structure and the division of profits betweenhuman and financial capital. In a democratic society where financialwealth is concentrated, a political majority may prefer to restraingovernance by dispersed equity investors even if this reduces profits.The reason is that labor claims are exposed to undiversifiable risk, sovoters with small financial stakes may prefer lender (or large share-holder) dominance, as they choose lower risk strategies. The modelmay explain the great reversal phenomenon in the first half of the20th century (Rajan and Zingales, 2003), when some financially verydeveloped countries moved towards bank or state control as a finan-cially weakened middle class became concerned about income risk.We offer evidence using post WW1 inflationary shocks as the sourceof identifying exogenous variation.
- Sprache
-
Englisch
- Erschienen in
-
Series: Tinbergen Institute Discussion Paper ; No. 04-091/2
- Klassifikation
-
Wirtschaft
Financial Institutions and Services: Government Policy and Regulation
Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- Thema
-
government policy and regulation
capital budgeting
investment policy
financing policy
capital and ownership structure
mergers
acquisitions
restructuring
corporate governance
Corporate Governance
Finanzintermediation
Bank
Medianwähler-Modell
Ökonomische Theorie der Demokratie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Perotti, Enrico C.
von Thadden, Ernst-Ludwig
- Ereignis
-
Veröffentlichung
- (wer)
-
Tinbergen Institute
- (wo)
-
Amsterdam and Rotterdam
- (wann)
-
2004
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:46 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Perotti, Enrico C.
- von Thadden, Ernst-Ludwig
- Tinbergen Institute
Entstanden
- 2004
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