Revisiting the Bright and Dark Sides of Capital Flows in Business Groups
Prior studies report that the business group structure and the associated intra-group capital flows are prone to conflicts of interest between controlling shareholders and minority investors. Yet business group is a prevalent and stable structure around the globe, particularly where capital markets...
| Main Author: | |
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| Contributors: | ; |
| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
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| Interlibrary Loan: | Interlibrary Loan for the Fachinformationsdienste (Specialized Information Services in Germany) |
| Published: |
2016
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| In: |
Journal of business ethics
Year: 2016, Volume: 134, Issue: 4, Pages: 509-528 |
| Further subjects: | B
Expropriation
B G31 B Corporate governance B G32 B Business group B G34 B G15 B Financial constraints B Emerging market |
| Online Access: |
Volltext (JSTOR) Volltext (lizenzpflichtig) |
| Summary: | Prior studies report that the business group structure and the associated intra-group capital flows are prone to conflicts of interest between controlling shareholders and minority investors. Yet business group is a prevalent and stable structure around the globe, particularly where capital markets are underdeveloped. Using data from China, this paper empirically studies the trade-off between the negative and positive roles played by intra-group capital flows and tests the efficiency implications of such trade-off. We find that from the perspective of the whole group, intra-group capital flows are most efficient when the groups are least subject to conflicts of interest between controlling shareholders and minority shareholders and when they face strong external financing constraints. |
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| ISSN: | 1573-0697 |
| Contains: | Enthalten in: Journal of business ethics
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| Persistent identifiers: | DOI: 10.1007/s10551-014-2382-6 |