ALMEIDA, HEITOR V.; WOLFENZON, DANIEL - In: Journal of Finance 61 (2006) 6, pp. 2637-2680
We provide a new rationale for pyramidal ownership in family business groups. A pyramid allows a family to access all retained earnings of a firm it already controls to set up a new firm, and to share the new firm's nondiverted payoff with shareholders of the original firm. Our model is...