Takeover Bids, The Free-Rider Problem, and the Theory of the Corporation

Hart, Oliver; Grossman, Sanford J.

doi:10.2307/3003400

Cited by 2,463 publications

(1,298 citation statements)

References 8 publications

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“…Indeed, while participatory accountability requires individual participation, participation itself is a social dilemma; it involves a private cost, yet it benefits others, and its efficacy requires a significant number of participants. Hence, participation might be subject to "free-riding" (Samuelson, 1954;Olson, 1965;Grossman and Hart, 1980;Ostrom, 1998). It follows that effective participatory accountability may depend, at least partly, on individuals' propensity to cooperate with others for the common good.…”

Section: Introductionmentioning

confidence: 99%

Participatory accountability and collective action: Experimental evidence from Albania

Barr

Packard

Serra

2014

European Economic Review

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Participatory accountability is often advocated as the solution to deficient top-down accountability systems. However, the evidence on the effectiveness of participatory accountability institutions is mixed and the reasons behind the contrasting results produced by the literature are unclear. We argue that the mixed evidence could be owing at least partly to heterogeneities in individuals' willingness and ability to overcome collective action problems. We investigate whether individuals' propensity to cooperate with others for the common good plays a role in their decisions to participate in both a school accountability system -i.e., a "short route" to accountability -and parliamentary electionsi.e., a "long route" to accountability. We combine survey data on 1800 individuals' participation decisions with measures of their willingness to contribute to a public good in the context of a very simple, clearly defined laboratory experiment. We conduct our study in a new democracy, Albania, involving a representative sample of parents of children enrolled in primary schools. Our findings confirm that, both across individuals within communities and across communities, cooperativeness in a simple public goods game correlates with both the decisions to participate in holding teachers and school directors accountable via school-level institutions and the decision to participate in holding all public servants to account via national elections.JEL CODES: C93, D72, H4, O12

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Section: Introductionmentioning

confidence: 99%

Participatory accountability and collective action: Experimental evidence from Albania

Barr

Packard

Serra

2014

European Economic Review

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“…Large shareholders enjoy cash flow and control benefits from the companies they run. 1 They have powerful incentives to collect information and monitor managers in order to maximize their profits (Shleifer and Vishny (1986), Grossman and Hart (1980), Amihud and Lev (1981)). As the ownership stake increases, ceteris paribus, shareholders have greater incentives to raise a firm's profit by taking risky projects.…”

Section: Introductionmentioning

confidence: 99%

Corporate Risk-Taking and Ownership Structure

Paligorova

2009

SSRN Journal

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“…E mail: joatribo@emp.uc3m.es 1 Examples of seminal papers are Berle and Means (1932), Jensen and Meckling (1976), Grossman and Hart (1980), Schleifer and Vishny (1986) and Burkart et al (1997). 2 Barclay and Holderness (1989), Barclay et al (1993) and Zingales (1994) measure private benefits indirectly by showing that large blocks of ownership that confer voting rights sell at a premium.…”

Section: Introductionmentioning

confidence: 99%

Ownership structure and minority expropriation: the case for multiple blockholders

Gutiérrez

Tribó

Mariano

2012

Applied Financial Economics

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This article investigates minority expropriation in closely-held firms. Using a sample of Spanish firms for the period from 1996 to 2006, we find that firms that are more vulnerable to minority expropriation have blockholders controlling groups with aggregate equity stakes that are far removed from 50%, which is the point that maximizes the chances of expropriation. Moreover, performance improves when the controlling group's stake moves away from the region where expropriation is more likely -the alignment effect -and, if within this region, when the number of group members increases -the bargaining effect.

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Takeover Bids, The Free-Rider Problem, and the Theory of the Corporation

Cited by 2,463 publications

References 8 publications

Participatory accountability and collective action: Experimental evidence from Albania

Participatory accountability and collective action: Experimental evidence from Albania

Corporate Risk-Taking and Ownership Structure

Ownership structure and minority expropriation: the case for multiple blockholders

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