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The Evolution of Ownership Disclosure Rules across Countries

Author

Listed:
  • Mathias M. Siems
  • Michael C. Schouten

Abstract

Over recent years, a number of regulators have launched proposals to expand the obligation to disclose major share ownership in listed companies. This article shows that these are not stand-alone developments. Using a unique dataset comprising data from 25 countries over 11 years (1995-2005) and collected by the Centre for Business Research of the University of Cambridge, we empirically study the evolution of ownership disclosure rules across countries. The analysis demonstrates that these rules have become more stringent over time, in the sense that disclosure thresholds have been lowered, and that there has been convergence. A breakdown of the results suggests that the degree of countries’ economic development is a relevant factor in explaining the differences between countries. The analysis also suggests a positive correlation between ownership disclosure and other variables that protect minority shareholders, as well as a positive correlation between the stringency of countries’ ownership disclosure rules and the degree of dispersed ownership. In the article, we offer various possible explanations for these results. Going forward, while it appears unlikely that disclosure thresholds will be lowered much further, ownership disclosure rules can be expected to continue to evolve in other dimensions. Regulators are likely to broaden the definition of the stake that triggers disclosure, so as to ensure that the ultimate owner is reached. In addition, regulators may require more information be disclosed when the notification is made, so as to enable other investors and issuers to adequately assess the implications of major share ownership.

Suggested Citation

  • Mathias M. Siems & Michael C. Schouten, 2009. "The Evolution of Ownership Disclosure Rules across Countries," Working Papers wp393, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp393
    Note: PRO-2
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    Citations

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    Cited by:

    1. Fons-Rosen, Christian & Kalemli-Ozcan, Sebnem & Sørensen, Bent E. & Villegas-Sanchez, Carolina & Volosovych, Vadym, 2021. "Quantifying productivity gains from foreign investment," Journal of International Economics, Elsevier, vol. 131(C).
    2. Sebnem Kalemli-Ozcan & Bent Sorensen & Vadym Volosovych, 2014. "Deep Financial Integration And Volatility," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1558-1585, December.
    3. Stotz, Olaf & Wanzenried, Gabrielle & Döhnert, Karsten, 2010. "Open-market purchases of public equity by private equity investors: Size and home-bias effects," Journal of Economics and Business, Elsevier, vol. 62(6), pages 562-576, November.
    4. Morck, Randall & Deniz Yavuz, M. & Yeung, Bernard, 2011. "Banking system control, capital allocation, and economy performance," Journal of Financial Economics, Elsevier, vol. 100(2), pages 264-283, May.
    5. Olaf Stotz, 2011. "The influence of geography on the success of private equity: investments in listed equity," Applied Financial Economics, Taylor & Francis Journals, vol. 21(21), pages 1605-1615.
    6. Armour, J. & Deakin, S. & Mollica, V. & Siems, M.M., 2010. "Law and Financial Development: What we are learning from time-series evidence," Working Papers wp399, Centre for Business Research, University of Cambridge.

    More about this item

    Keywords

    ownership disclosure; shareholder protection; comparative company law; law and finance; legal convergence;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General

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