Management Papers
Document Type
Journal Article
Date of this Version
8-2009
Publication Source
The Review of Financial Studies
Volume
22
Issue
8
Start Page
3047
Last Page
3091
DOI
10.1093/rfs/hhn080
Abstract
In large U.S. corporations, founding families are the only blockholders whose control rights on average exceed their cash-flow rights. We analyze how they achieve this wedge, and at what cost. Indirect ownership through trusts, foundations, limited partnerships, and other corporations is prevalent but rarely creates a wedge (a pyramid). The primary sources of the wedge are dual-class stock, disproportionate board representation, and voting agreements. Each control-enhancing mechanism has a different impact on value. Our findings suggest that the potential agency conflict between large shareholders and public shareholders in the United States is as relevant as elsewhere in the world.
Copyright/Permission Statement
This is a pre-copyedited, author-produced PDF of an article accepted for publication in The Review of Financial Studies following peer review. The version of record is available online at: http://rfs.oxfordjournals.org/content/22/8/3047.short.
Recommended Citation
Villalonga, B., & Amit, R. H. (2009). How Are U.S. Family Firms Controlled?. The Review of Financial Studies, 22 (8), 3047-3091. http://dx.doi.org/10.1093/rfs/hhn080
Included in
Business Administration, Management, and Operations Commons, Entrepreneurial and Small Business Operations Commons, Finance and Financial Management Commons
Date Posted: 27 November 2017
This document has been peer reviewed.