Ownership: Evolution and Regulation

Award Winner: 
Winner of the 2004 ECGI Clinical Paper Competition. Joint winner of the 2005 Standard Life Investments Finance Prize (Best paper in the Finance Working Paper series)

Ownership: Evolution and Regulation

Julian Franks, Colin Mayer, Stefano Rossi

Series number :

Serial Number: 

Date posted :

January 01 2003

Last revised :

SSRN Share


  • ownership • 
  • control • 
  • stock markets • 
  • investor protection

This paper is the first study of long-run evolution of investor protection and corporate ownership in the U.K. over the 20th century. Formal investor protection only emerged in the second half of the century. We assess its influence on ownership by comparing cross-sections of firms at different times in the century and the evolution of firms incorporating at different stages of the century.

Investor protection had little impact on dispersion of ownership: even in the absence of investor protection, there was a high rate of dispersion of ownership, primarily associated with mergers. Ownership dispersion in the UK relied more on informal relations of trust than on formal systems of regulation. Preliminary evidence for this comes from the geographical proximity of shareholders to their boards of directors, the absence of price discrimination in takeovers and retention of directors of target boards in merged firms.

Published in

Published in: 
Publication Title: 
Review of Financial Studies
Volume 22, Issue 10, 1 October 2009, Pages 4009–4056,


Real name:
Fellow, Research Member
Blavatnik School of Government and Saïd Business School, University of Oxford