Ownership and Control in Joint Ventures: Theory and Evidence

Hauswald, Robert; Hege, Ulrich

doi:10.2139/ssrn.302924

Cited by 61 publications

(60 citation statements)

References 40 publications

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“…Also, the papers on partial benefits of control and coalitions of voters, often derived from Zwiebel's (1995) important contribution, stress that 50% is the only acceptable threshold for control (Earle et al, 2004), even if it is shared among several owners acting jointly. In the case of joint ventures, Hauswald and Hege (2003) show that the optimal ownership clustering for rent extraction by the majority owner lays around 50% of the equity stakes. Furthermore, the 50% 4 threshold mechanically avoids counterintuitive results, like the existence of two controllers for the same company, as obtained by some authors.…”

Section: Introductionmentioning

confidence: 98%

Controlling firms through the majority voting rule

Chapelle

Szafarz

2005

Physica A: Statistical Mechanics and its Applications

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Pyramids, cross-ownership, rings and other complex features inducing control tunnelling are frequent in the European and Asian industrial world. Based on the matrix methodology, this paper offers a model for measuring integrated ownership and threshold-based control, applicable to any group of interrelated firms. In line with the theory on pyramidal control, the model avoids the double counting problem and sets the full-control threshold at the conservative -but incontestable -majority level of 50% of the voting shares. Any lower threshold leads to potential inconsistencies and leaves unexplained the observed high level of ownership of many dominant shareholders. Furthermore, the models lead to ultimate shareholders' control ratios consistent with the majority voting rule. Finally, it is applied to the Frère Group, a large European pyramidal holding company known for mastering control leverages.

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Section: Introductionmentioning

confidence: 98%

Controlling firms through the majority voting rule

Chapelle

Szafarz

2005

Physica A: Statistical Mechanics and its Applications

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“…8 In Veugelers and Kesteloot's (1996) sample, even though the data cover partnerships between unevenly sized firms, more than 50% exhibit 50-50 ownership. Similarly, in Hauswald and Hege's (2003) sample of two-parent joint ventures, about two thirds have 50-50 equity allocations.…”

Section: The Modelmentioning

confidence: 99%

Efficient partnership dissolution under buy-sell clauses

Frutos

Kittsteiner

2008

The RAND Journal of Economics

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“…In a different environment, De Frutos and Kittsteiner (2008) theoretically explore an auction mechanism for assigning the role of offeror. 5 According to Hauswald and Hege (2006), 80% of all joint ventures incorporated in the U.S.…”

Section: Theoretical Frameworkmentioning

confidence: 99%