The Decoupling of Voting and Economic Ownership (IVOR nr. 88) 2012/2.3.1:2.3.1 Dataset and methodology

The Decoupling of Voting and Economic Ownership (IVOR nr. 88) 2012/2.3.1

2.3.1 Dataset and methodology

Documentgegevens:

mr. M.C. Schouten, datum 01-06-2012

Datum: 01-06-2012
Auteur: mr. M.C. Schouten
JCDI: JCDI:ADS598270:1
Vakgebied(en): Ondernemingsrecht / Rechtspersonenrecht

The CBR Index contains data for 25 countries over 11 years (1995-2005). The data on ownership disclosure mies thus consists of 275 observations. Explanations and references to the relevant provisions of law are available online.1 Earlier articles describe the coding methodology of the CBR Index in detail.2 Here, we limit ourselves to describing the variable that codes the mies on ownership disclosure. It is defined as follows:

"Disclosure of major share ownership: Equals 1 if shareholders who acquire at least 3% of the companies capital have to disclose it; equals 0.75 if this concerns 5% of the capital; equals 0.5 if this concerns 10%; equals 0.25 if this concerns 25%; equals 0 otherwise3

This definition is preferable to the one used in La Porta et al. 's investor protection index.4 The latter does not provide a meaningful picture for the differences between countries: intermediate scores are not allowed, and a score of "1" is already attributed if a country requires disclosure by a 10% shareholder.5 The result is that 19 out of the 20 countries, which are covered by both of the indices, get an optimal score (Table 1). By contrast, the CBR Index uses thresholds that are better able to capture the differences between the stringency of ownership disclosure tules across countries.6

Table 1: Comparison between CBR Index and La Porta et al. in 20007

Countries	CBR Index	La Porta et aL
Argentina	0.75	1
Brazil	0.75	1
Canada	0.5	1
Chile	0.5	1
France	0.75	1
Germany	0.75	1
India	0.75	1
Italy	1	1
Japan	0.75	1
Mexico	0	1
Malaysia	0.75	1
Netherlands	0.75	1
Pakistan	0.5	0
South Africa	0.75	1
Spain	0.75	1
Sweden	0.75	1
Switzerland	0.75	1
Turkey	0.75	1
United Kingdom	1	1
United States	0.75	1

Toon alle voetnoten

Voetnoten

Voetnoten

M. Siems, P. Lele, P. Iglesias-Rodriguez, V. Monica, T. Klauberg, S. Heidenhain, N. Cankar, J. Hamilton, G. Schnyder and P. Akman, CBR Shareholder Protection Index — 25 countries, 2009, available at http://www.cbr.cam.ac.uldresearch/programme2/project2-20output.htm.

P. Lele and M. Siems, 'Shareholder Protection: A. Leximetric Approach' (2007) 7 Tourral of Corporate Law Studies 17, 25-30; Siems, supra note 8 at 116-21; J. Armour, S. Deakin, P. Lele and M. Siems, 'How Do Legal Rules Evolve? Evidence from a Cross-Country Comparison of Shareholder, Creditor, and Worker Protection' (2009) 57 American Tourral of Comparative Law 579, 599-604.

The full index is included in the Appendix.

La Porta et al., supra note 7 at 6.

We also believe that for our purposes, the definition we use is also preferable to the one used in La Porta et al's anti-self-dealing index. While this index consists of three sub-variables relating to disclosure of ownership in the issuer, these only refer to periodic disclosure obligations by the issuer, not ad hoc disclosure by the relevant shareholder. Djankov et al., supra note 7 at 434.

In faimess, the variable used in La Porta et al's investor protection index does address the issue of whether indirect share ownership also triggers a disclosure obligation, whereas the variable used in the CBR Index does not. However, as will be argued below, La Porta et al's variable is insufficiently specific to capture relevant differences between countries in this respect (see infra note 86 and accompanying text).

Sources: CBR Index, supra note 25; La Porta et al., supra note 7 at 6 (data available at http://www.economics.harvard.edu/faculty/shleifer/files/securities_datal.xls).