Abstract
The theory of law and finance proposed by La Porta et al. (1998) predicts that minority controlled ownership structures, i.e. the structures that allow voting rights to exceed cash-flow rights, are more frequent in legal contexts where investors are not well protected against the expropriation attempts orchestrated by controlling shareholders. The purpose of our study is to test this prediction in a unique environment, that of the province of Quebec. Quebec's distinct status hinges on the fact that it is a Civil Law jurisdiction in a country, Canada, which is made up of nine other provinces with a Common Law tradition. Overall, the results support the theory. Quebec's Civil Law tradition appears to lead to a greater concentration of voting rights and a wider separation between voting rights and ownership rights.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
