Scale of Corporations, Industry- specifities and voting blocks: a private benefit approach
The major shareholdings directive (88/627/EEC) enables a detailed analysis of the stake and the identity of the largest shareholders of European stock listed corporations. However, in continental Europe only a limited number of studies provide an empirical analysis of the ownership and control of corporations. This study updates the data of the ECGN reports by analysing voting blocks of listed corporations in six European countries. Second, 1999 was the year Europe introduced the euro. The new database therefore allows to test on an European comparative level whether Demsetz and Lehn's theory (1985) that larger corporations have a more dispersed ownership structure stands up to scrutiny. Third, Bebchuk's rent-seeking theory (1999) of the evolution of ownership and control will be partly tested. The private benefits of control for a given corporation depends not only on the legal rules as proven by La Porta et al. (1997) but also on company-specific and industry-specific parameters. If the theory of industry-specific private benefits stands up to scrutiny, a one way analysis of variance indicates significant differences between the means of the voting block of the largest shareholder for industry grouped companies. The results only partially confirm the influence of industry-specific characteristics. In different countries, different industries are characterised by different shareholder concentration patterns.