Corporate control in Europe

Data from the EU?s Large Holdings Directive (88/627/EEC) allow detailed analyses of the control of European corporations to be undertaken for the first time. This paper reports results from an international study of these data by members of the European Corporate Governance Network. It records high levels of concentration of control of corporations in many European countries with single blockholders frequently controlling more than 50 % of corporate votes. In contrast, a majority of U.K. listed companies have no blockholder owning more than 10 % of shares and a majority of U.S. listed companies have no blockholder with more than 6 % of shares. Distributions of voting blocks reveal that control is concentrated in forms in which regulation confers particular advantages : shareblocks are concentrated at levels at which there are significant control benefits. This suggests a relation between regulation and the structure of ownership of companies that goes beyond existing "over-", "under-" or "optimal-regulation" theories. The paper discusses an alternative view that ownership is largely irrelevant in the face of dominant management control. It also considers a contending thesis that the technology driven project realisation periods are relevant to the period for which corporate control needs to be exerted. Classification JEL : G31, G34