In many countries with concentrated ownership

Question

Quizplus · Accepted Answer

In countries with concentrated ownership, the large controlling shareholders often have more power and can make decisions that benefit themselves rather than the smaller outside shareholders. This leads to greater conflicts of interest between these groups, compared to conflicts between managers and shareholders. Therefore, option B is the best choice. Option A is incorrect because while conflicts of interest can be worse in countries with concentrated ownership, it is not necessarily between shareholders and managers. Option C is incorrect for the same reason; conflicts are typically worse between large controlling shareholders and outside shareholders. Option D is also incorrect as corporate forms with concentrated ownership are not rare in many countries.

In Many Countries with Concentrated Ownership