Agency Conflicts and Ownership Concentration
Abstract
The aim of this review is to classify research papers on “major vs. minor shareholders” conflicts and ownership concentration. These issues are closely related both to each other and to “manager vs. owner” conflicts. Ownership concentration is property distribution among shareholders. Ownership concentration studies consider the following questions: how many major and minor shareholders are there in the company; how many inside shareholders are there and if they are minor or major; in what way concentration influences performance of the company; what costs are associated with “major vs. minor shareholders” conflicts etc. The bond between ownership concentration and “manager vs. owner” conflict is due to the fact that often managers are major shareholders along with other owners. In such cases incentive hypothesis, entranchement hypothesis, monitoring and control costs, as well as their effect on performance, should be considered together.