Corporate Governance and Control Marco Becht,Patrick Bolton,and Alisa Roell NBER Working Paper No.9371 December 2002 JEL No.G32,G34 ABSTRACT Corporate governance is concerned with the resolution of collective action problems among dispersed investors and the reconciliation of conflicts of interest between various corporate claimholders.In this survey we review the theoretical and empirical research on the main mechanisms of corporate control,discuss the main legal and regulatory institutions in different countries,and examine the comparative corporate governance literature.A fundamental dilemma of corporate governance emerges from this overview:regulation of large shareholder intervention may provide better protection to small shareholders;but such regulations may increase managerial discretion and scope for abuse. Marco Becht Patrick Bolton ECARES,Universite Libre de Bruxelles Department of Economics CP114 001 Fisher Hall Avenue F.D.Roosevelt 50 Princeton University 1050 Brussels Princeton,NJ 08544-1021 Belgium and NBER mbecht@ulb.ac.be Pbolton@princeton.edu Alisa Roell Bendheim Center for Finance Princeton University 26 Prospect Avenue Princeton,NJ 08540-5296 aroell@princeton.eduCorporate Governance and Control Marco Becht, Patrick Bolton, and Alisa Röell NBER Working Paper No. 9371 December 2002 JEL No. G32, G34 ABSTRACT Corporate governance is concerned with the resolution of collective action problems among dispersed investors and the reconciliation of conflicts of interest between various corporate claimholders. In this survey we review the theoretical and empirical research on the main mechanisms of corporate control, discuss the main legal and regulatory institutions in different countries, and examine the comparative corporate governance literature. A fundamental dilemma of corporate governance emerges from this overview: regulation of large shareholder intervention may provide better protection to small shareholders; but such regulations may increase managerial discretion and scope for abuse. Marco Becht Patrick Bolton ECARES, Université Libre de Bruxelles Department of Economics CP 114 001 Fisher Hall Avenue F. D. Roosevelt 50 Princeton University 1050 Brussels Princeton, NJ 08544-1021 Belgium and NBER mbecht@ulb.ac.be Pbolton@princeton.edu Alisa Röell Bendheim Center for Finance Princeton University 26 Prospect Avenue Princeton, NJ 08540-5296 aroell@princeton.edu