Imen Ben Saanoun, Youssef Riahi, Saoussen Othmani and Mounira Ben Arab
Despite the importance of private benefits of control in France and the persistence of concentration of ownership, the link between private benefits of control and ownership structure is still a frequently mentioned and addressed issue in the literature. Our study contributes to the literature by providing an empirical analysis of the harmonies between shareholders and their effect on private benefits of control. In this paper, we concentrate on this relationship by developing a model where the coalition or the contestability of control influences the size of private benefits of control. On a sample of 44 French listed companies for the period 2001- 2011, the empirical analysis produces some interesting results. It demonstrates that the concentrated ownership is a factor that promotes divergence of interests between shareholders. Controlling shareholders hold the most important part of property rights compared to the minority who will further expropriate corporate resources. We conclude that shareholders' agreement is not a good Corporate Governance mechanism because it could be destructive of the firm’s value. In other words, if there were no agreement between the two largest shareholders, control and mutual monitoring of each other help to protect minority interests and can positively influence the firm’s value.
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