Thursday 18 December 2008

UK: corporate ownership and control

Over ten years ago research was published by La Porta, Lopez-de-Silanes, Sheifer and Vishny, which revealed the differences between common law and civil law countries with regard to the legal protection provided to shareholders. This work suggested that dispersed share ownership in common law countries could be explained by reference to the legal protection provided to minority shareholders; concentrated ownership in civilian countries is therefore the result of weak protection. 

The UK proves problematic for this thesis because share ownership became dispersed in the absence of strong legal protection. Indeed, La Porta et. al. have recognised the difficulties posed by the UK example in an article published earlier this year in the Journal of Economic Literature (and available here on ssrn). 

Against this background, the publication of Professor Brian Cheffins' book - Corporate Ownership and Control: British Business Transformed - is timely. Cheffins provides a rich, historical analysis of the separation of ownership and control within the UK from the seventeenth century to today. His book is providing the departure point for an interdisciplinary, one day conference being held in Cambridge on Monday, January 12.  Further information is available here

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