IDEAS home Printed from https://ideas.repec.org/a/emc/ecomex/v11y2002i1p31-57.html
   My bibliography  Save this article

Instituciones, costos de monitoreo y la elección de la estructura de propiedad corporativa

Author

Listed:
  • Ramón A. Castillo Ponce

    (Investigador, Banco de México; profesor, El Colegio de la Frontera Norte, Tijuana, B.C., México)

Abstract

Recent work finds that countries with poorly developed legal systems are characterized by firms with high concentrations of owner ship and narrow capital markets. The causality of this relationship, how ever, has not been formalized. This paper presents a theoretical model to analyze the influence of institutions on the decision to go public and the choice of ownership structure. The model shows that as the efficiency of legal institutions decreases, shareholder’s monitoring costs increase, the price that they are willing to pay for shares of the company decreases, and, in consequence, the market value of publicly traded firms decreases. The low market value of public firms leads firm owners to avoid the capital market. In addition, the model suggests that maintaining high concentra tions of ownership is a value maximizing choice of the firm owner when legal institutions are inefficient.

Suggested Citation

  • Ramón A. Castillo Ponce, 2002. "Instituciones, costos de monitoreo y la elección de la estructura de propiedad corporativa," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(1), pages 31-57, January-J.
    • Handle: RePEc:emc:ecomex:v:11:y:2002:i:1:p:31-57
    as

    Download full text from publisher

    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XI-1/02_RAMON_CASTILLO.pdf
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:emc:ecomex:v:11:y:2002:i:1:p:31-57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ricardo Tiscareño (email available below). General contact details of provider: https://edirc.repec.org/data/cideemx.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.