Ownership: Evolution and Regulation

This article is the first study of long-run evolution of investor protection and corporate ownership in the United Kingdom over the twentieth century. Formal investor protection emerged only in the second half of the century. We assess the influence of investor protection on ownership by comparing c...

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Bibliographic Details
Published in:The Review of financial studies 2009-10, Vol.22 (10), p.4009-4056
Main Authors: Franks, Julian, Mayer, Colin, Rossi, Stefano
Format: Article
Language:English
Subjects:
Accountancy
Big business
Business history
Business ownership
Business structures
Business studies
Commercial regulation
Comparative analysis
Corporate regulation
Equity
Impact analysis
Investors
Issued capital
Legal liability
Ownership and control
Protection
Shareholder relations
Shareholders
Stock exchanges
Studies
United Kingdom
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Summary:This article is the first study of long-run evolution of investor protection and corporate ownership in the United Kingdom over the twentieth century. Formal investor protection emerged only in the second half of the century. We assess the influence of investor protection on ownership by comparing cross-sections of firms at different times in the century and the evolution of firms incorporating at different stages of the century. Investor protection had little impact on dispersion of ownership: even in the absence of investor protection, rates of dispersion of ownership were high, associated primarily with mergers. Preliminary evidence suggests that ownership dispersion in the United Kingdom relied more on informal relations of trust than on formal investor protection.
ISSN:0893-9454
1465-7368
DOI:10.1093/rfs/hhn108