Value of Corporate Control: Some International Evidence

Existing literature shows that the market values control because controlling shareholder can generate private benefits and improve the efficiency of the corporation. In this study, we provide a measure of the value of control for a set of domestic and foreign transactions. Our measure of the value of control is the difference between the offer premium for minority and comparable majority transactions. We find that the median control premiums in the United States are around 30%. The control premium in 'market-oriented' countries are higher than that for the "bank-oriented" countries. Also, we find that the premiums are lower in "cross-border" transactions relative to "domestic transactions."

JEL Classification: G30, G34

Suggested Citation: Suggested Citation

Hanouna, Paul E. and Sarin, Atulya and Shapiro, Alan C., Value of Corporate Control: Some International Evidence (2001). USC Finance & Business Econ. Working Paper No. 01-4, Available at SSRN: https://ssrn.com/abstract=286787 or http://dx.doi.org/10.2139/ssrn.286787