A Reexamination of Tunneling and Business Groups: New Data and New Methods

Loading...
Thumbnail Image
Penn collection
Management Papers
Degree type
Discipline
Subject
Business Administration, Management, and Operations
Funder
Grant number
License
Copyright date
Distributor
Related resources
Author
Siegel, Jordan
Choudhury, Prithwiraj
Contributor
Abstract

One of the most rigorous methodologies in the corporate governance literature uses firms' reactions to industry shocks to characterize the quality of governance. This methodology can produce the wrong answer unless one considers the ways firms compete. Because macro-level shocks reverberate differently at the firm level depending on whether a firm has a cost structure that requires significant adjustment, the quality of governance can only be elucidated accurately analyzing a firm's business strategy and their corporate governance. These differences can help one determine whether the fruits of a positive macro-level shock have been expropriated by insiders. Using the example of Indian firms, we show that an influential finding is reversed when these differences are considered. We further argue that the conventional wisdom about tunneling and business groups will need to be reformulated in light of the data, methodology, and findings presented here.

Advisor
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Publication date
2012-06-01
Journal title
The Review of Financial Studies
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
Recommended citation
Collection