Open AccessInternational private benefits of control: New evidence
Author(s) -
Nhut H. Nguyen,
Yubo Liu
Publication year - 2011
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv8i4p4
Subject(s) - private benefits of control , investor protection , control (management) , shareholder , agency (philosophy) , business , corporate governance , agency cost , differential (mechanical device) , principal–agent problem , financial crisis , finance , monetary economics , accounting , financial system , economics , philosophy , management , macroeconomics , epistemology , engineering , aerospace engineering
The 1998 Asian Financial Crisis and more recent corporate scandals in the U.S. have triggered an increased attention of researchers and policy makers on the agency problem between controlling shareholders and minority investors. One respect of this problem is the private benefits of control. In this paper, we investigate the relationship between investor protection and private benefits of control. We find consistent evidence with Dyck and Zingales (2004) that the degree of investor protection still matters in curbing private control benefits for the more recent period 1999-2007. More importantly, we find that private benefits of control have decreased significantly over time. Finally, our results show weak evidence of differential decreases in the value of control for weak and strong investor protection countries.