The Equity Markets, Ownership Structures and Control: Towards an International Harmonisation?
This paper provides an overview of the evolution of the equity markets and ownership structures in the nineties. Data on the equity markets show that the primary distinction between market-oriented and network-oriented systems must be readjusted. In some network-oriented countries equity markets became broader and more valuable. It seems that firms in network-oriented countries are seeking external capital without opting into legal systems that are more protective of minorities. Existing ownership structures are relatively stable and adjusting slowly. The importance of the non-financial sector is diminishing in most European countries while foreign shareholders and institutional investors extend their stakes. These trends do not indicate that control in most European countries has shifted towards the markets: the non-financial sector still holds most of the large stakes and controls a significant number of small and large stock exchange listed companies in continental Europe. This new evidence has important consequences on the existing research on the influence of legal aspects of external finance. Not only the ownership concentration but also the nature of the shareholding concentration must be added in those models.