The benefits and costs of group affiliation: Evidence from East Asia

Arbeitspapier

This paper investigates the benefits and associated agency costs of using internal capital markets through affiliating with groups using data of two thousand firms from nine East Asian economies between 1994-6. We find that mature and slow-growing firms with ownership structures more likely to create agency problems gain more from group affiliation, while young and high-growth firms more likely lose. Agency problems are important explanatory factors of firm value in economies outside Japan, but less so in Japan. Consistent with the literature, financially constrained firms benefit from group affiliation. Our results are robust to different time periods and estimation techniques.

Object Details

• ISBN: 9291902179
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Discussion Paper ; No. 2002/47

Classification and Topics

• Classification: Wirtschaft ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Firm Organization and Market Structure
• Subject: business group ; group affiliation ; East Asian corporations ; Wertpapieremission ; Eigentümerstruktur ; Organschaft ; Ostasien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Claessens, Stijn ; Fan, Joseph P.H. ; Lang, Larry H. P.
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/52948
• Last update: 10.03.2025, 11:43 AM CET