1. Describe the Demsetz (1983) argument and discuss its implications for the empirical work of Morck, Shleifer, and Vishny (1988) and McConnell and Servaes (1990).
2. What is the endogeneity problem in empirical analyses of the relation between corporate value and performance and corporate ownership structure? How do empirical studies such as Agrawal and Knoeber (1996), Himmelberg, Hubbard, and Palia (1999), and Demsetz and Villalonga (2001) propose to deal with this problem? What do these studies conclude?