Ultimate ownership, investor protection and firm valuation: evidence for Asian countries non-financial firms

In this paper we investigate the causal relationship between ultimate shareholder's cash-flow rights and firm valuation performance for some Asian countries. More precisely, we test the incentive effect hypothesis. Using data for 1,740 publicly listed non-financial firms from eight Asian countries for 1996, we find that firm value increases with cash-flow rights of the ultimate shareholder. This result is consistent with previous empirical studies. Also, we show that common law environment offers better protection for minority shareholders. Moreover, the positive effect of ultimate shareholder cash-flow rights is stronger in civil law countries.