Corpus ID: 27245802

The political economy of dominant investors

@inproceedings{Perotti2004ThePE,
  title={The political economy of dominant investors},
  author={E. Perotti and E. Thadden},
  year={2004}
}
  • E. Perotti, E. Thadden
  • Published 2004
  • Business
  • We allow the preference of a political majority to determine boththe corporate governance structure and the division of profits betweenhuman and financial capital. In a democratic society where financialwealth is concentrated, a political majority may prefer to restraingovernance by dispersed equity investors even if this reduces profits.The reason is that labor claims are exposed to undiversifiable risk, sovoters with small financial stakes may prefer lender (or large share-holder) dominance… CONTINUE READING
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