We extend agency theory to propose that structural reform positively impacts firm profitability indeveloping countries because the improvements in external monitoring that accompany structuralreform decrease the agency costs faced by firms. However, we also argue that not all firmsbenefit...

The literature is divided in its opinion about the impact of concentration of ownership on firmperformance. On the one hand, concentration of ownership that, in turn, concentratesmanagement control in the hands of a strategic investor, eliminates agency problemsassociated with dispersed...

Business groups in emerging markets perform better than unaffiliatedfirms. One explanation is that business groups substitute some functions ofmissing institutions, for example, enforcing contracts. We investigate thisby setting up a model where firms within the business group are connectedto...