@techreport{Grechenig2010derivative,
abstract = {We address one of the cardinal puzzles of European corporate law: the lack of derivate share-holder suits. We explain this phenomenon on the basis of percentage limits which require share-holders to hold a minimum amount of shares in order to bring a lawsuit. We show that, under this legal regime, managers will collude with large shareholders by means of settlements or bribes that impose a negative externality on small shareholders. Contrary to conventional agency models, we find that large shareholders do not monitor the management; as a consequence, there is no free riding opportunity for small shareholders.},
address = {Bonn},
author = {Kristoffel Grechenig and Michael Sekyra},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {K22; K42; G30; 330; Derivative Shareholder Suits; Percentage Limits; Collusion; Monitoring; Free Riding; Corporate Governance; Aktion\"{a}re; Zivilprozess; F\"{u}hrungskr\"{a}fte; Multinationales Unternehmen; Agency Theory; Europa; USA},
language = {eng},
number = {2010,15},
publisher = {Max Planck Inst. for Research on Collective Goods},
title = {No derivative shareholder suits in Europe: A model of percentage limits and collusion},
type = {Preprints of the Max Planck Institute for Research on Collective Goods},
url = {http://hdl.handle.net/10419/38864},
year = {2010}
}
