by Raffele Corvino; CeRP WP n. 194/19
I quantify private benefits of control, and their impact on stock prices, by estimating a structural model of optimal shareholding using data on the ownership dynamics of Italian public companies. The results show that controlling shareholders generally have positive and persistent impact on stock prices, and the impact is larger during the last Eurozone debt crisis. The results imply that controlling shareholders are particularly beneficial for the rest of the company shareholders during negative economic cycles. I also provide evidence of a synergistic effect when the controlling shareholder is a corporation.
Published: September 2019