Propping and tunneling: Empirical evidence from Japanese keiretsu

Dow, Sandra; McGuire, Jean

doi:10.1016/j.jbankfin.2009.05.012

Cited by 76 publications

(40 citation statements)

References 44 publications

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“…Whether firm value would be maximized in the presence of large controlling shareholders depends on the entrenchment effect (Claessens et al, 2002;Villalonga and Amit, 2006;Dow and McGuire, 2009). Several studies document either a direct (e.g., Shleifer and Vishny, 1986;Claessens et al, 2002;Hu and Zhou, 2008) or a non-monotonic (e.g., Morck et al, 1988;McConnell and Servaes, 1995;Davies et al, 2005) relationship between ownership structure and firm performance while others (e.g., Demsetz and Lehn, 1985;Himmelberg et al, 1999;Demsetz and Villalonga, 2001) find no relation between ownership concentration and firm performance.…”

Section: Ownership Structure and The Agency Costs Of Debt And Equitymentioning

confidence: 99%

Capital structure, equity ownership and firm performance

Margaritis¹,

Psillaki

2010

Journal of Banking & Finance

609

374

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Section: Ownership Structure and The Agency Costs Of Debt And Equitymentioning

confidence: 99%

Capital structure, equity ownership and firm performance

Margaritis¹,

Psillaki

2010

Journal of Banking & Finance

609

374

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“…CEO and directors (Gao & Kling 2008;Jiang et al 2010), whereas foreign ownership (FOROWN) is percentage of shares held by foreign investors both individual and institutional (Dahlquist & Robertsson 2001;Dow & McGuire 2009;Young et al 2008). Five control variables are also used in the model.…”

Section: Research Approachmentioning

confidence: 99%

Managerial Ownership Influencing Tunnelling Behaviour

Juliarto¹,

Tower²,

Zahn³

et al. 2013

AABFJ

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This study investigates the extent and the determinants of tunnelling behaviour in five ASEAN countries (i.e. Indonesia, Malaysia, Philippines, Singapore, and Thailand). Related party transactions (RPTs) in the form of loans to related parties are used as the proxy for tunnelling. With 200 firm-year observations over the period [2006][2007][2008][2009], this study finds a positive association between managerial ownership and the extent of tunnelling.The other important findings are that business environment (BE), foreign ownership, and independent directors are ineffective governance mechanisms to rein in tunnelling behaviour. This suggests that regulators need to evolve more effective governance mechanisms. The other important findings are that business environment (BE), foreign ownership, and independent directors are ineffective governance mechanisms to rein in tunnelling behaviour. This suggests that regulators need to evolve more effective governance mechanisms.

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“…Korean Chaebols (1990Chaebols ( -1995 Propping and tunneling Group affiliation Firm excess value Propping to the weakest members Dow and McGuire (2009) Japanese Keireitsu (1987Keireitsu ( -2001 Propping and tunneling IGJ specific methodology to assign affiliation strength and differentiating between three periods Performance Tunneling during strong economic times, and propping during recession This paper explores the motivations for growth using a SBG rather than a standalone firm by studying the link between SMEs' governance and performance. This study first assesses the accuracy of the expropriation hypothesis in SBGs.…”

Section: Introductionmentioning

confidence: 99%

Small business groups enhance performance and promote stability, not expropriation. Evidence from French SMEs

Hamelin

2011

Journal of Banking & Finance

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a b s t r a c tThis paper investigates the influence that a firm's distance from control has on its performance, using balance sheet information and a unique data set on small business ownership. This study fills a gap in the empirical governance literature by investigating whether there is expropriation of minority shareholders in small business groups. Contrary to observations for large business groups, results show a positive relationship between the separation of control from ownership and firm performance. Results also underline that tunneling promotes controlling shareholders' profit stability rather than profit maximization in small business groups.

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Propping and tunneling: Empirical evidence from Japanese keiretsu

Cited by 76 publications

References 44 publications

Capital structure, equity ownership and firm performance

Capital structure, equity ownership and firm performance

Managerial Ownership Influencing Tunnelling Behaviour

Small business groups enhance performance and promote stability, not expropriation. Evidence from French SMEs

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