Ownership, Control and Governance of European and US Corporations

This paper reports substantial differences in the ownership and control of companies across countries both in terms of concentration of control and the type of investor exerting control. It reports significant differences not only between Anglo-American and Continental European systems but also between the UK and US and within Continental Europe. Voting blocks are concentrated at levels at which regulation confers particular control benefits. This suggests a relation between regulation and the structure of ownership of companies that goes beyond existing “over-regulation” or “minority protection” theories. The paper argues that ownership structures are less relevant to traditional agency problems than to the nature of corporate activities. Differences in systems may therefore reflect the industrial composition of economies and the evolution of systems may be driven by the emergence of new technologies. Regulation should therefore be sensitive to both the different and changing needs of corporate sectors across countries and time. JEL Classification : G31; G34