Corporate Control around the World (2020) Flashcards
Which of the following best describes the relationship between legal origin and corporate control?
a) Common-law countries are more likely to have family-controlled firms due to weaker shareholder protections.
b) Civil-law countries tend to have dispersed ownership structures due to strong shareholder rights.
c) Legal origin significantly influences corporate control patterns across firm sizes and ages.
d) Legal origin has no systematic impact on ownership concentration across countries.
C
- How do shareholder protection rights influence ownership structures?
a) Strong shareholder protections are unrelated to ownership structures.
b) Strong shareholder protections foster dispersed ownership by reducing the reliance on concentrated control.
c) Weak shareholder protections increase the number of widely held corporations.
d) Weak shareholder protections promote dispersed ownership by increasing shareholder activism.
B
- Why are equity blocks found in over 80% of non-controlled firms globally?
a) Equity blocks are an indicator of weak shareholder protections.
b) Concentrated ownership is persistent even in firms classified as widely held.
c) Firms with equity blocks have more stable governance structures.
d) The presence of equity blocks is exclusive to common-law countries.
B
- What is the relationship between GDP per capita and dispersed ownership?
a) A strong negative correlation exists between GDP per capita and dispersed ownership for all firm sizes.
b) Higher GDP per capita strongly correlates with dispersed ownership only for small and medium-sized firms.
c) Higher GDP per capita weakly correlates with dispersed ownership for large corporations.
d) Dispersed ownership decreases as GDP per capita increases in emerging markets.
C
- In civil-law countries, why is family or state control more common than in common-law countries?
a) Civil-law countries prioritize dispersed ownership to enhance governance.
b) Weak investor protections incentivize concentrated control to safeguard ownership interests.
c) Civil-law countries have no significant emphasis on governance frameworks.
d) Strong labor regulations discourage family-controlled firms.
B
- What role do labor regulations play in ownership concentration?
a) Strong labor regulations weaken controlling shareholders’ influence in civil-law countries.
b) Strong labor regulations correlate with higher ownership concentration by aligning with controlling shareholders.
c) Weak labor regulations promote more concentrated ownership across countries.
d) Labor regulations have no measurable impact on corporate control patterns.
B
- Which of the following is a key difference between French and German civil-law countries?
a) German civil-law countries have the highest concentration of family-controlled firms compared to French civil-law countries.
b) French civil-law countries exhibit stronger family and state control compared to German civil-law countries.
c) French civil-law countries have a more balanced ownership structure compared to Scandinavian countries.
d) German civil-law countries rank higher in equity block concentration than French civil-law countries.
B
- Why are common-law countries associated with lower levels of family-controlled firms?
a) Common-law countries have stronger shareholder protection rights, reducing the need for concentrated ownership.
b) Family-controlled firms are prohibited under common-law governance systems.
c) Common-law countries prioritize government-controlled firms over family-controlled firms.
d) Shareholder protections are weaker in common-law countries, reducing family control.
A
- What does the substitution effect of corporate control suggest?
a) Corporate control complements strong shareholder protections by enhancing dispersed ownership.
b) Corporate control substitutes for weak shareholder protections by acting as a safeguard.
c) Corporate control and shareholder protections are unrelated and operate independently.
d) Corporate control becomes unnecessary in the presence of strong shareholder protections.
B
- Why do smaller firms in emerging markets struggle to transition to dispersed ownership?
a) High financial frictions limit growth and expansion.
b) Weak labor regulations discourage investor interest in small firms.
c) Strong GDP growth reduces the appeal of dispersed ownership for smaller firms.
d) The substitution effect of corporate control is stronger in emerging markets, preventing ownership dispersion.
A
What is the significance of the Shapley-Shubik Index in the paper?
A) It measures the extent of shareholder protection rights.
B) It quantifies voting power in firms with multiple large shareholders.
C) It calculates GDP-adjusted ownership concentration.
D) It predicts the likelihood of government intervention in firms.
B
How do institutional investors affect ownership concentration?
A) Institutional investors increase ownership concentration in all countries.
B) Institutional investors foster dispersed ownership, especially in common-law countries.
C) Institutional investors have no significant impact on ownership concentration.
D) Institutional investors always favor concentrated ownership to maintain control.
B
What does “Corporate Control Around the World” (2020) suggest about the relationship between corporate control and shareholder protection rights?
A) Strong shareholder protection rights are unrelated to corporate control patterns.
B) Shareholder protection rights are systematically linked to dispersed ownership, indicating that corporate control can substitute for weak shareholder protection.
C) Better shareholder protection rights lead to a higher concentration of corporate control.
D) The relationship between shareholder protection rights and corporate control is inconsistent and varies widely across countries.
E) Corporate control is more prevalent in countries with strong shareholder protection rights.
B
What percentage of non-controlled firms have equity blocks?
A) Less than 20%
B) Around 50%
C) More than 80%
D) Exactly 60%
C
How does labor regulation correlate with corporate control?
A) Stricter labor laws correlate with more concentrated corporate control.
B) Stricter labor laws lead to more dispersed ownership.
C) Labor regulations have no significant impact on corporate control.
D) Countries with weak labor protections have higher ownership concentration.
A
