Abstract
Ownership Concentration, Corporate Voting Rights and the Efficiency of Capital Allocation This paper surveys research on corporate governance, with special attention to the importance of legal protection of investors and of ownership concentration in corporate governance systems in Europe. One share-one vote encourages the selection of an efficient management team. Families are the most pronounced type of controlling shareholders in Europe, especially in France and Italy. Investor protection (by law) turns out to be crucial because, in many countries, expropriation of minority shareholders by the controlling shareholders is extensive. The efficiency of capital allocation is positively correlated with the legal protection of investors. The agency model predicts larger capital markets in countries where agency costs are reined in by the law and the institutions built to support their enforcement. JEL classifications : G32, K22, D23, G34, L21
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