Shleifer, AndreiVishny, Robert W.2010-02-011986Shleifer, Andrei and Robert W. Vishny. 1986. Large shareholders and corporate control. Journal of Political Economy 94(3): 461-488.0022-3808http://nrs.harvard.edu/urn-3:HUL.InstRepos:3606237In a corporation with many small owners, it may not pay any one of them to monitor the performance of the management. We explore a model in which the presence of a large minority shareholder provides a partial solution to this free-rider problem. The model sheds light on the following questions: Under what circumstances will we observe a tender offer as opposed to a proxy fight or an internal management shake-up? How strong are the forces pushing toward increasing concentration of ownership of a diffusely held firm? Why do corporate and personal investors commonly hold stock in the same firm, despite their disparate tax preferences?en-USJournal Article10.1086/261385