حفاظت از سرمایه گذار و بازارهای سهام

We present a simple model of an entrepreneur going public in an environment with poor legal protection of outside shareholders. The model incorporates elements of Becker's (J. Political Econ. 106 (1968) 172) “crime and punishment” framework into a corporate finance environment of Jensen and Meckling (J. Financial Econ. 3 (1976) 305). We examine the entrepreneur's decision and the market equilibrium. The model is consistent with a number of empirical regularities concerning the relation between investor protection and corporate finance. It also sheds light on the patterns of capital flows between rich and poor countries and on the politics of reform of investor protection.

Recent research reveals that a number of important differences in financial systems among countries are shaped by the extent of legal protection afforded outside investors from expropriation by the controlling shareholders or managers. The findings show that better legal protection of outside shareholders is associated with: (1) more valuable stock markets (La Porta et al., 1997); (2) a higher number of listed firms (La Porta et al., 1997); (3) larger listed firms in terms of their sales or assets (Kumar et al., 1999); (4) higher valuation of listed firms relative to their assets (Claessens et al., 2002; La Porta et al., 2002); (5) greater dividend payouts (La Porta et al., 2000a); (6) lower concentration of ownership and control (European Corporate Governance Network, 1997; La Porta et al., 1999; Claessens et al., 2000); (7) lower private benefits of control (Zingales, 1994; Nenova, 1999); and (8) higher correlation between investment opportunities and actual investments (Wurgler, 2000). While the understanding of the empirical differences in the patterns of corporate finance has advanced considerably, the theoretical work in this area is only beginning. A number of studies explicitly model the expropriation of minority shareholders by the controlling shareholders (see, among others, Grossman and Hart, 1988; Harris and Raviv, 1988; Hart, 1995; Burkart 1997 and Burkart 1998; Friedman and Johnson, 2000) and the legal framework underlining such expropriation (La Porta et al., 1998; Johnson et al., 2000). Other studies attempt to explain theoretically why control is so concentrated in countries with poor shareholder protection (Zingales, 1995; La Porta et al., 1999; Bebchuk, 1999), and why such organizational form as pyramids may be common (Wolfenzon, 1999). Still other studies, such as Bennedsen and Wolfenzon (2000), argue that control structures with multiple large shareholders may be efficient in environments with poor shareholder protection. La Porta et al. (2002) make the case for higher concentration of cash flow ownership (and not just control) in countries with poor shareholder protection. Each of these studies has focused on specific aspects of legal environments with weak shareholder protection. But a market equilibrium model of corporate finance in such environments remains to be developed.1 In this paper we present one such model. The model incorporates elements of Becker's (1968) classic “crime and punishment” framework into a corporate finance environment as in Jensen and Meckling (1976). We consider an entrepreneur trying to raise equity finance for a project, and deciding how much equity to sell and how big a project to undertake. We follow the literature (Zingales, 1995; Bebchuk, 1999) in maintaining that the entrepreneur keeps control of the project after the initial share offering. This entrepreneur operates in an environment with limited legal protection of outside shareholders, and so has an opportunity to divert some of the profits of the firm once they materialize (Shleifer and Vishny, 1997; Burkart et al., 1998). By doing so, he risks being sued and fined for breaking the law or the shareholder agreement. The quality of investor protection in our model is given by the likelihood that the entrepreneur is caught and fined for expropriating from shareholders. In this simple model, we show how the entrepreneur's decisions on the size of the project and the amount of cash flow to sell are shaped by the legal environment. We then embed this going-public decision into a market equilibrium with savers and firms, and consider the determination of the size of the capital market. We consider both the case of the worldwide capital market and that of segmented national markets. Under plausible conditions, this model generates a number of predictions. Firms are larger, more valuable, and more plentiful, dividends are higher (and diversion of profits lower), ownership concentration is lower, and stock markets are more developed in countries with better protection of shareholders. In fact, the simple model delivers results corresponding to all eight findings summarized above. We then go on to apply the model to flows of funds between rich and poor countries. The model explains why such flows are limited, consistent with empirical evidence discussed by Lucas (1990). The model also generates predictions about the welfare effects of improvements in investor protection. In particular, it predicts that entrepreneurs gain more (or lose less) from an improvement in investor protection when the country is open to world capital flows than when it is not. This result is consistent with evidence that openness is correlated with financial development (Rajan and Zingales, 2001). Entrepreneurs are more likely to use their political influence to improve investor protection when the country is open to capital flows. The next section presents the model. Section 3 describes the demand and supply of funds. The equilibrium is described in Section 4. Section 5 presents an extension of the model to analyze the magnitude of the capital flows from rich to poor countries. Section 6 analyzes the welfare effects from an improvement in investor protection. Proofs are relegated to the appendix.

In this paper, we present a very basic model of an entrepreneur going public in an environment with poor legal protection of outside shareholders. We examine this entrepreneur's decisions and the market equilibrium. The model clarifies a number of assumptions needed to obtain empirically valid predictions on corporate ownership patterns, dividend policies, firm valuation, and financial development in the regimes of poor investor protection. Under these assumptions, the model is consistent with the basic empirical regularities concerning the relation between investor protection and corporate finance. In addition, the model makes a number of general equilibrium predictions concerning the patterns of capital flows among countries, as well as the politics of corporate governance reform. These predictions appear to be consistent with recently developed empirical evidence.