Firm-specific factors affecting the private benefits of control in concentrated ownership economies

Ronen Barak, Beni Lauterbach

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review


Purpose - To seek firm-specific determinants of private benefits (PBs) in a concentrated ownership economy and compare the evidence with Barclay and Holderness (1989) findings on disperse ownership firms. Design/methodology/ approach - We estimate the PBs of control implicit in 54 large block transactions in Israel, via an elaborated Barclay and Holderness (1989) methodology, and then examine possible determinants of PBs using multivariate regressions. Findings - Cross-sectional regressions indicate that PBs, as a proportion of firm's market value, decrease with firm's size, leverage, and profitability and increase when an individual or family controls the firm. Research limitations/implications - Our results reinforce and are even stronger and more significant than Barclay and Holderness (1989) U.S. evidence, possibly because the magnitude of PBs in concentrated ownership economies is much higher than in disperse ownership economies. The main limitation is our reliance on one country (Israel) data only. Originality/value - We extend Barclay and Holderness (1989) study to a concentrated ownership economy, and document clearer and more significant results on the determinants of the PBs of control.

Original languageEnglish
Title of host publicationAdvances in Financial Economics
Number of pages19
StatePublished - 2012

Publication series

NameAdvances in Financial Economics


  • Block trades
  • Concentrated ownership
  • Private benefits

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)


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