Multiple large shareholders and corporate risk taking: Evidence from East Asia

Corporate Governance: An International Review

Volumn 19, Issue 6, 2011, Pages 507-528

  Mishra, Dev R ^a  

^a UNIVERSITY OF SASKATCHEWAN   (Canada)

Author keywords

Agency costs; Corporate governance; Corporate risk taking; Investor protection; Large shareholders

Indexed keywords

EID: 80054938810     PISSN: 09648410     EISSN: 14678683     Source Type: Journal    
DOI: 10.1111/j.1467-8683.2011.00862.x     Document Type: Article

References (74)

1. Acharya, V., Amihud, Y., & Litov, L. 2009. Creditor rights and corporate risk-taking. NBER Working Paper Series. Available at SSRN:.
2. Amihud, Y. & Lev, B. 1981. Risk reduction as a managerial motive for conglomerate mergers. Rand Journal of Economics, 12: 605-618.
3. Anderson, R. & Reeb, D. 2003. Founding-family ownership, corporate diversification, and firm leverage. Journal of Law and Economics, 46: 653-684.
4. Anderson, R., Reeb, D., & Mansi, S. 2003. Founding-family ownership and the agency cost of debt. Journal of Financial Economics, 68: 263-285.
5. Attig, N., Ghoul, S. E., & Guedhami, O. 2009. Do multiple large shareholders play a corporate governance role? Evidence from East Asia. Journal of Financial Research, 32: 395-422.
6. Attig, N., Guedhami, O., & Mishra, D. 2008. Multiple large shareholders, control contest, and implied cost of equity. Journal of Corporate Finance, 14: 721-737.
7. Bae, K.-H., Kang, J.-K., & Kim, J.-M. 2002. Tunneling or value added? Evidence from mergers by Korean business groups. Journal of Finance, 57: 2695-2740.
8. Beck, T., Demirguç-Kunt, A., & Levine, R. 2003. Law, endowments, and finance. Journal of Financial Economics, 70: 137-181.
9. Bennedsen, M. & Wolfenzon, D. 2000. The balance of power in closely held corporations. Journal of Financial Economics, 58: 113-139.
10. Berle, A. & Means, G. 1932. The modern corporation and private property. New York: Mc-Millan.
11. Bertrand, M., Johnson, S., Samphantharak, K., & Schoar, A. 2008. Mixing family with business: A study of Thai business groups and the families behind them. Journal of Financial Economics, 88: 466-498.
12. Bertrand, M., Mehta, P., & Mullainathan, S. 2002. Ferreting out tunneling: An application to Indian business groups. Quarterly Journal of Economics, 117: 121-148.
13. Bloch, F. & Hege, U. 2003. Multiple large shareholders and control contests. GREQAM & HEC Working paper.
14. Boubakri, N., Guedhmai, O., & Mishra, D. 2010. Family control and the implied cost of equity: Evidence before and after the Asian financial crisis. Journal of International Business Studies, 41: 451-474.
15. Bris, A. & Cabolis, C. 2008. The value of investor protection: Firm evidence from cross-border mergers. Review of Financial Studies, 21: 605-648.
16. Burkart, M., Gromb, D., & Panunzi, F. 1997. Large shareholders, monitoring, and the value of the firm. Quarterly Journal of Economics, 112: 693-728.
17. Burkart, M., Panunzi, F., & Shleifer, A. 2003. Family firms. Journal of Finance, 58: 2167-2202.
18. Bushman, R., Piotroski, J. & Smith A. 2004. What determines corporate transparency? Journal of Accounting Research 42: 207-252.
19. Campbell, J. 1996. Understanding risk and return. Journal of Political Economy 104: 298-345.
20. Chen, E. & Nowland, J. 2010. Optimal board monitoring in family-owned companies: Evidence from Asia. Corporate Governance: An International Review, 18: 3-17.
21. Chen, K., Chen, Z., & Wei, K. 2009. Legal protection of investors, corporate governance, and the cost of equity capital. Journal of Corporate Finance, 15: 273-289.
22. Claessens, S., Djankov, S., Fan, J., & Lang, L. 2002. Disentangling the incentive and entrenchment effects of large shareholdings. Journal of Finance, 57: 2741-2771.
23. Claessens, S., Djankov, S., & Lang, L. 2000. The separation of ownership and control in East Asian corporations. Journal of Financial Economics, 58: 81-112.
24. Coles, J., Lemmon, M., & Meschke, F. 2007. Structural models and endogeneity in corporate finance: The link between managerial ownership and corporate performance. Available at SSRN:.
25. Dahya, J., Dimitrov, O., & McConnell, J. 2008. Dominant shareholders, corporate boards, and corporate value: A cross-country analysis. Journal of Financial Economics, 87: 73-100.
26. Demirguç-Kunt, A. & Levine, R. 2001. Financial structure and economic growth: A cross-country comparison of banks, markets, and development. Cambridge, MA: MIT Press.
27. Demsetz, H. & Lehn, K. 1985. The structure of corporate ownership: Causes and consequences. Journal of Political Economy, 93: 1155-1177.
28. Dhillon, A. & Rossetto, S. 2009. Corporate control and multiple large shareholders. Warwick University Working Paper.
29. Durnev, A., Morck, R., & Yeung, B. 2004. Value enhancing capital budgeting and firm-specific stock return variation. Journal of Finance, 59: 65-105.
30. Edmans, A. & Manso, G. 2010. Governance through trading and intervention: A theory of multiple blockholders. Review of Financial Studies, First published online: December 14, 2010; doi: 10.1093/rfs/hhq145.
31. Ellul, A., Guntay, L., & Lel, U. 2009. Blockholders, debt agency costs, and legal protection. FRB International Finance Discussion Paper No. 908. Available at SSRN:.
32. Faccio, M. & Lang, L. 2002. The ultimate ownership of Western European corporations. Journal of Financial Economics, 65: 365-395.
33. Faleye, O., Mehrotra, V., & Morck, R. 2006. When labor has a voice in corporate governance. Journal of Financial and Quantitative Analysis, 41: 489-510.
34. Fan, J. & Wong, T. 2002. Corporate ownership structure and the informativeness of accounting earnings in East Asia. Journal of Accounting and Economics, 33: 401-425.
35. Fan, J. & Wong, T. 2005. Do external auditors perform a corporate governance role in emerging markets? Evidence from East Asia. Journal of Accounting Research, 43: 1-38.
36. Fogel, K. 2006. Oligarchic family control, social economic outcomes, and the quality of government. Journal of International Business Studies, 37: 603-622.
37. Fogel, K., Morck, R., & Yeung, B. 2008. Big business stability and economic growth: Is what's good for General Motors good for America? Journal of Financial Economics, 89: 83-108.
38. Gomes, A. & Novaes, W. 2005. Sharing of control versus monitoring as corporate governance mechanisms. Working Paper, Wharton School.
39. Grossman, S. & Hart, O. 1988. One-share-one-vote and the market for corporate control. Journal of Financial Economics, 20: 175-202.
40. Guedhami, O. & Mishra, D. 2009. Excess control, corporate governance, and implied cost of equity: International evidence. The Financial Review, 44: 489-524.
41. Guedhami, O. & Pittman, J. 2006. Ownership concentration in privatized firms: The role of disclosure standards, auditor choice, and auditing infrastructure. Journal of Accounting Research, 44: 889-929.
42. Hail, L. & Leuz, C. 2006. International differences in cost of equity capital: Do legal institutions and securities regulations matter? Journal of Accounting Research, 44: 485-531.
43. Haw, I.-M., Hu, B., Hwang, L.-S., & Wu, W. 2004. Ultimate ownership, income management, and legal and extra-legal institutions. Journal of Accounting Research, 42: 423-462.
44. Himmelberg, C., Hubbard, R., & Palia, D. 1999. Understanding the determinants of managerial ownership and the link between ownership and performance. Journal of Financial Economics, 53: 353-384.
45. Holderness, C. 2009. The myth of diffuse ownership in the United States. Review of Financial Studies, 22: 1377-1408.
46. Jensen, M. & Meckling, W. 1976. Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3: 305-360.
47. John, K., Litov, L., & Yeung, B. 2008. Corporate governance and risk-taking. The Journal of Finance, 63: 1679-1728.
48. Kahn, C. & Winton, A. 1998. Ownership structure, speculation, and shareholder intervention. Journal of Finance, 53: 99-129.
49. La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. 1999. Corporate ownership around the world. Journal of Finance, 54: 471-517.
50. La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. 2006. What works in securities laws? Journal of Finance, 61: 1-32.
51. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. 1998. Law and finance. Journal of Political Economy, 106: 1113-1155.
52. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. 2000. Investor protection and corporate governance. Journal of Financial Economics, 58: 3 - 27.
53. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. 2002. Investor protection and corporate valuation. Journal of Finance, 57: 1147-1170.
54. Laeven, L. & Levine, R. 2008. Complex ownership structures and corporate valuations. Review of Financial Studies, 21: 579-604.
55. Laeven, L. & Levine, R. 2009. Bank governance, regulation, and risk taking. Journal of Financial Economics, 93: 259-275.
56. Leuz, C., Nanda, D., & Wysock, P. 2003. Earnings management and investor protection: An international comparison. Journal of Financial Economics, 69: 505-527.
57. Lombardo, D. & Pagano, M. 2002. Law and equity markets: A simple model. In J. A. McCahery (Ed.), Corporate governance regimes: Convergence and diversity: 343-362. London: Oxford University Press.
58. Maury, B. & Pajuste, A. 2005. Multiple controlling shareholders and firm value. Journal of Banking and Finance, 29: 1813-1834.
59. May, D. 1995. Do managerial motives influence firm risk-reduction strategies? Journal of Finance, 50: 1291-1308.
60. Megginson, W. & Netter, J. 2001. From state to market: A survey of empirical studies on privatization. Journal of Economic Literature, 39: 321-389.
61. Morck, R. & Nakamura, M. 1999. Banks and corporate control in Japan. Journal of Finance, 54: 319-339.
62. Morck, R., Wolfenzon, D., & Yeung, B. 2005. Corporate governance, economic entrenchment, and growth. Journal of Economic Literature, 43: 655-720.
63. Morck, R., Yeung, B., & Yu, W. 2000. The information content of stock markets: Why do emerging markets have synchronous stock price movements? Journal of Financial Economics, 59: 215-238.
64. Nenova, T. 2003. The value of corporate voting rights and control: A cross-country analysis. Journal of Financial Economics, 68: 325-351.
65. Pagano, M. & Röell, A. 1998. The choice of stock ownership structure: Agency costs, monitoring, and the decision to go public. Quarterly Journal of Economics, 113: 187-225.
66. Paligorova, T. 2010. Corporate risk-taking and ownership structure. Bank of Canada Working Paper.
67. Shleifer, A. & Vishny, R. 1986. Large shareholders and corporate control. Journal of Political Economy, 94: 461-488.
68. Shleifer, A. & Wolfenzon, D. 2002. Investor protection and equity markets. Journal of Financial Economics, 66: 3-27.
69. Shyu, Y.-W. & Lee, C. 2009. Excess control rights and debt maturity structure in family-controlled firms. Corporate Governance: An International Review, 17: 611-628.
70. Stulz, R. 2005. The limits of financial globalization. Journal of Finance, 60: 1595-1638.
71. Villalonga, B. & Amit, A. 2010. Family control of firms and industries. Financial Management, 39: 863-904. forthcoming.
72. Winton, A. 1993. Limitation of liability and the ownership structure of the firm. Journal of Finance, 48: 487-512.
73. Yeh, Y., Lee, T., & Woidtke, T. 2001. Corporate governance and performance: The case of Taiwan. International Review of Finance, 2: 21-48.
74. Zwiebel, J. 1995. Block investment and partial benefits of corporate control. Review of Economic Studies, 62: 161-185.