Kuwait-University-Journal-of-Law-header
Search
Journal of Law

Previous Issues

Advance Search
Year : From To Vol
Issue Discipline:
Author

Volume :39 Issue : 148 2013      Add To Cart                                                                    Download

Ownership Concentration, Family Control and Corporate Value

Auther : Dr. Ali R. AL-Mutairi

     This paper investigates the link between corporate valuation and ownership structure using a sample of 182 Kuwaiti-listed firms from 2005 to 2008. More specifically, it examines the impact of ownership concentration by major shareholders and family control on corporate value. This impact is addressed based on two different yet related hypotheses. The first hypothesis refers to the monitoring effect which posits that major shareholders have strong incentives to monitor managers, in order to maximize corporate profit. The second hypothesis refers to the entrenchment effect which suggests that major shareholders are more likely to extract corporate resources to their own benefits at the expense of small shareholders. Overall, the results show that family ownership is positively related to corporate value. Also, ownership concentration by other large controlling shareholders contributes to the corporate valuation, and this contribution is more pronounced in non-family firms. The results reported in this paper indicate that the monitoring effect hypothesis dominates the entrenchment effect hypothesis.

Journal of Law
Journal of Law

You are Visitor No.

97173

Journal of Law
Journal of Law
Tell your friendsJournal of Law
Journal of Law

Last Updated

Oct 31, 2021

Journal of Law
Journal of Law
Journal of Law

Please enter your email Here to receive our news

Journal of Law