Sharif Digital Repository

Ownership concentration and the separation of voting rights from cash flow rights are common in countries with weak legal protections for minority shareholders. These characteristics shift the agency problem from conflict of interests between managers and shareholders to conflict of interests between majority and minority shareholders. In such ownership structures, majority shareholders receive dividends based on their cash flow rights but exert control over the company according to their voting rights. Consequently, they have both the motivation and the ability to withhold profit distribution among minority shareholders and prioritize their own interests. Iran, as a country characterized by...