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Table:
International corporate governance - Tentative characterizations of legal and
empirical state of large firm ownership
structures in various countries as of 1980-1995: Introduction: Some of the characterizations can be
found in Shleifer and Vishny [1996, pages 49-55]. Precautionary statement:
The first version of this table was primarily made out of memory and
consequently it lacks adequate references and may contain errors about the
actual legal and empirical state of the different institutions. As time
passes more references will be added. |
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Tentative characterizations of legal and empirical
state of large firm ownership structures in developing
countries as of 1980-1995 |
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A) Laws on foreign ownership. |
Legal state:
Foreign ownership is often prohibited. This picture is beginning to chance
fast for most developing countries that open up their capital market for foreign
investments. Empirical state: Foreign ownership is rare in many developing countries. |
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B) Laws on ownership of
non-financials by financial firms. |
Legal state:
Financial firms are not allowed to own non-financials. Empirical state: Hardly any
ownership by institutional investors. |
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C) Laws on state ownership. |
Legal state:
Many important industries are preserved for government ownership. This
picture is beginning to chance fast for most developing countries that project
large-scale privatizations. Empirical state: Probably the most common form of ownership. |
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D) Laws on other kinds of
ownership. |
Legal state:
Family ownership and public ownership is possible. Empirical state: Concentrated family ownership dominates together with state ownership,
but public equity markets are very small. |
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Tentative characterizations of legal and empirical state of large firm ownership structures in |
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A) Laws on foreign ownership. |
Legal state:
The restrictions on foreign ownership of German firms are virtually
non-existing today. Empirical state: An increasing and very significant number of firms are owned holly
or partly by foreign investors. |
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B) Laws on ownership of
non-financials by financial firms. |
Legal state:
fewer barriers. Banks and institutional investors are able to own controlling
stakes in non-financial firms. Empirical state: A lot of equity is financed non-publicly by institutional investors
who have some degree of long-term commitment to the firm. The degree of concentration
is generally very high. |
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C) Laws on state ownership. |
Legal state:
Important areas in the economy are restricted for state ownership. Empirical state: Railroads
and most postal services are still state owned. So are medical services,
education, elder care and many public utilities. |
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D) Laws on other kinds of
ownership. |
Legal state:
Otherwise there are few restrictions. Empirical state: Public equity markets are small. A lot of equity is financed
non-publicly by families who have some degree of long-term commitment to the
firm. The degree of owner concentration is generally very high. |
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Tentative characterizations of
legal and empirical state of large firm ownership structures in |
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A) Laws on foreign ownership. |
Legal state:
Until recently restrictions on foreign ownership. Empirical state: Foreign ownership is rare. |
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B) Laws on ownership of
non-financials by financial firms. |
Legal state:
Formally financial investors are not allowed to own non-financial firms.
However, they are allowed to cooperate in order to gain control and this is
often the case. In particular, several institutional investors form
consortiums to control several firms and the monitor job is delegated to one
investor in each consortium who also is informally responsible for possible
loses of other investors money due to negligent monitoring. Empirical state: Most equity, public or not, is hold by financial investors. |
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C) Laws on state ownership. |
Legal state: Important
areas in the economy are restricted for state ownership. Empirical state: Railroads and most postal services are still state owned. So are
medical services, education and elder care. |
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D) Laws on other kinds of
ownership. |
Legal state:
Few barriers. Empirical state: Public equity markets are large, and the majority is hold by shareholders
that have some degree of long-term commitment to the firm. This include institutional
investors, but also major customers and suppliers. |
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Tentative characterizations of legal and empirical
state of large firm ownership structures in Anglo-American
countries as of 1980-1995 |
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A) Laws on foreign ownership. |
Legal state:
The restrictions on foreign ownership of the Empirical state: An increasing and very significant number of firms are owned holly
or partly by foreign investors. |
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B) Laws on ownership of
non-financials by financial firms. |
Legal state:
Many barriers. E.g. banks and institutional investors are not allowed to own
non-financial firms, see Roe [1990, page 10]. However, recently this has been
allowed in cases of temporary reconstruction of a firm’s finances. Empirical state: In aggregate, the equity of most public firms primarily comes from
financial investors. |
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C) Laws on state ownership. |
Legal state:
A very limited part of the economy is preserved for state ownership. Empirical state: Most areas of the economy are privately run, although education
receives huge state subsidies. |
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D) Laws on other kinds of
ownership. |
Legal state:
Very few barriers. Empirical state: Family ownership is not common among large enterprises. Public
equity markets are large and ownership very dispersed so that a majority of equity
is hold by investors who are not closely involved with the firm. |
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Tentative characterizations of legal and empirical
state of large firm ownership structures in |
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A) Laws on foreign ownership. |
Legal state:
The restrictions on foreign ownership of Danish firms are virtually
non-existing today. Empirical state: An increasing and very significant number of firms are owned holly
or partly by foreign investors. |
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B) Laws on ownership of
non-financials by financial firms. |
Legal state:
Banks and institutional investors are not able to own controlling stakes in
non-financial firms. Empirical state: Institutional investors and banks are now financing more than 30% of
both the public and the non-public equity market for large corporations, Beretning
fra Finanstilsynet various volumes. |
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C) Laws on state ownership. |
Legal state:
Important areas in the economy are restricted for state ownership. Empirical state: Railroads and most postal services are still state owned. So are medical
services, education and elder care. |
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D) Laws on other kinds of
ownership. |
Legal state:
Otherwise there are few restrictions. Empirical state: The degree of concentration is generally very high and public equity
markets are becoming more important than non-public equity markets. Family ownership in terms of foundation
ownership is still very important. |
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- Copyright 1997-2008, ViamInvest. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Legal notice. |
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