Investor Protection and Corporate Valuation

ArXiv ID: ssrn-313475 “View on arXiv”

Authors: Unknown

Abstract

We present a model of the effects of legal protection of minority shareholders and of cash-flow ownership by a controlling shareholder on the valuation of firms

Keywords: minority shareholder protection, cash flow ownership, controlling shareholder, corporate valuation, agency theory, Equities

Complexity vs Empirical Score

• Math Complexity: 4.5/10
• Empirical Rigor: 3.0/10
• Quadrant: Philosophers
• Why: The paper is a theoretical corporate finance model with standard optimization and equilibrium derivation, scoring moderate math complexity, but lacks code, backtests, or detailed empirical data implementation, resulting in low empirical rigor.

  flowchart TD
    A["Research Goal: How do minority shareholder protection and cash-flow ownership by a controlling shareholder affect corporate valuation?"] --> B["Methodology: Theoretical Model Development"]
    B --> C["Data Inputs: Firm-level valuation metrics, Legal protection indices, Ownership concentration data"]
    C --> D["Computational Process: Regression analysis and equilibrium modeling of agency costs"]
    D --> E["Key Findings: Stronger legal protection and higher controlling ownership increase firm valuation, but effects interact nonlinearly"]