Does Control Still Matter? Controlling Minority Shareholders and Firm Value in a Modern Governance Setting

Sammanfattning

Controlling minority shareholders (CMS) hold controlling shares of publicly traded firms' votes, while retaining only a minority share of cash flow rights, creating a wedge between control and economic rights that may create agency conflicts. In this paper, we revisit the relationship between ownership structure and firm value in Sweden, given the evolving corporate landscape of recent decades. Using a panel of Swedish listed firms with firm and time fixed effects, we find that the results are sensitive to both the inclusion of ownership identity and the choice of specification. When ownership identity is ignored, the wedge between voting and cash flow rights is positively associated with firm value. Once owner type is accounted for, however, this effect disappears and voting ownership becomes negatively associated with Tobin's q, consistent with entrenchment arguments in the prior literature. Notably, this negative effect appears to be mitigated for founder-family controlled firms, suggesting that investor perceptions of concentrated control vary meaningfully across owner types. A lifecycle analysis finds limited evidence that the relationship between ownership structure and firm value evolves systematically as firms mature, with apparent age effects largely driven by time variation rather than true within-firm dynamics. Combined, the findings reveal a potential shift in investor perceptions concerning control structures and highlight that the valuation consequences of controlling ownership depend critically on who holds control.