This paper analysis whether the closely relationship between group banks and group companies control overinvestment problem by debt regulation, using financial and ownership structure data of Philippines listed companies. And group companies are expected to have highly concentrated ownership structure and to be managed for long span. What is the difference of the responsiveness to debt of group companies? Estimation results show ; i) the group companies with poor investment opportunities display debt regulation, ii) the companies with highly concentrated ownership structure have neither debt regulation nor borrowing restraint, and iii) old companies have debt regulation. After all debt regulation effect restrains overinvestment problem in the group companies with poor investment opportunities and this effect is caused not by concentrated ownership structure but by management for a long time.
2005年7月9日, Analysis of the Overinvestment Problem of Business Group companies: Estimation of Investment Function of Philippine listed companies Number 2005-03 19 pages long [5] p.
