Measuring the separation of dividend and control rights under cross-ownership among firms

With cross-ownership among firms a separation between dividend rights on common stocks and voting rights may occur. This paper proposes a method to trace control rights in a company that is based purely upon account- ing identities and the underlying data on cross-ownership relations amongfirms and privately held shares. Examples show that under cross-ownership, control and ownership of dividend rights may be entirely separated, and multiple equi- libria may exist in such economies. The proposed methodology is then applied to the conglomerate around the German 'Allianz' group.