Private Benefits of Control in the Technology, Media and Telecommunication Sector

Abstract: Recent literature suggests that private benefits of control are higher in the media industry than else where, as, at least inderctly, the controlling shareholders of a media company have the power to direct information. But with the explosion of the New Media, which established a new way of sharing communication&information, the landscape of the industry has been clearly revoluzionaized. The purpose of this paper is to analyze the private benefits of control in the enlarged Technology, Media and Telecommunication sector by analyzing the dual class share structure adopted by 69 companies over the last 18 years. In particularl, this paper will show that the voting premium has been falling and experiencing some abnormal breaks during the period. As showed in the second part of the analysis, among the 20 factors analyzed, liquidity, development of the financial markets, regulatory quality and investor protection are the best determinants of this phenomenon.