Andrei Shleifer and Robert W. Vishny (1986). Large Shareholders and Corporate Control

Large Shareholders and Corporate Control

by Andrei Shleifer and Robert W. Vishny
(1986)




1

,Main Questions of the Article:

The article discusses the role of large shareholders in overseeing rms’ activities by
focusing on how larger minority shareholders can impact business strategies, monitor
management, and changes that boost value creation. It raises inquiries, such as:


• How can larger investors help address the free-rider problem in monitoring
management?

• What factors need to be considered when it comes to tender o ers and situations
involving proxy ghts and management shake-ups?

• What is the purpose of having large shareholders in companies and what impact do
they have on the performance of the corporation?
2

fi ff fi

, Motivation of the Authors:


The reason for conducting this research is to highlight the importance of corporate
control mechanisms in improving the value of a company.
The authors aim to tackle concerns regarding the concentration of ownership and
control while shedding light on why having large shareholders is crucial for publicly
traded companies even with a dispersed ownership structure.




3