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Business Groups in Canada : Their Rise and Fall, and Rise and Fall Again
Morck, Randall - 2015
Family-controlled pyramidal business groups were important in Canada early in the 20th century, amid rapid catch-up industrialization, but largely gave way to widely held free-standing firms by mid- century. In the 1970s and early 1980s – an era of high inflation, financial reversal,...
Persistent link: https://www.econbiz.de/10013011941
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Tobin's Q, Corporate Diversification and Firm Performance
Lang, Larry H.P. - 2002
In this paper, we show that Tobin's q and firm diversification are negatively related. This negative relation holds for … different diversification measures and when we control for other known determinants of q. We show further that diversified firms … number of segment constant. Our evidence is consistent with the view that firms seek growth through diversification when they …
Persistent link: https://www.econbiz.de/10012787492
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Managerial Value Diversion and Shareholder Wealth
Bebchuk, Lucian A. - 2008
The agents to whom shareholders delegate the management of corporate affairs may transfer value from shareholders to themselves through a variety of mechanisms, such as self-dealing, insider trading, and taking of corporate opportunities. A common view in the law and economics literature is that...
Persistent link: https://www.econbiz.de/10012774878
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Executive Compensation : A Survey of Theory and Evidence
Edmans, Alex - 2017
This paper reviews the theoretical and empirical literature on executive compensation. We start by presenting data on the level of CEO and other top executive pay over time and across firms, the changing composition of pay; and the strength of executive incentives. We compare pay in U.S. public...
Persistent link: https://www.econbiz.de/10012951861
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Imperfect Financial Markets and Shareholder Incentives in Partial and General Equilibrium
Albagli, Elias - 2017
We analyze the firm-level and aggregate consequences of equity market imperfections in the form of noisy information aggregation for corporate risk-taking and investment. Market imperfections cause controlling shareholders to invest too much in upside risks and too little in downside risks in an...
Persistent link: https://www.econbiz.de/10012955940
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Internal Versus External Capital Markets
Gertner, Robert H. - 2010
This paper presents a framework for analyzing the costs and benefits of internal vs. external capital allocation. We focus primarily on comparing an internal capital market to bank lending. While both represent centralized forms of financing, in the former case the financing is owner-provided,...
Persistent link: https://www.econbiz.de/10013139878
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The Dark Side of Internal Capital Markets : Divisional Rent-Seeking and Inefficient Investment
Scharfstein, David S. - 2008
We develop a model that shows how rent-seeking behavior on the part of division managers can subvert the workings of an internal capital market. In an effort to stop rent-seeking, corporate headquarters will be effectively forced into paying bribes to some division managers. And because...
Persistent link: https://www.econbiz.de/10012774955
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Business Groups and Trade in East Asia : Part 1, Networked Equilibria
Feenstra, Robert C.; Huang, Deng-Shing; Hamilton, Gary G. - 2021
We propose an economic model of business groups that allows for the cooperative behavior of groups of firms, where the number and size of each group is determined endogenously. In this framework, more than one configuration of groups can arise in equilibrium: several different types of business...
Persistent link: https://www.econbiz.de/10013217600
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An International Perspective of Japan's Corporate Groups and Their Prospects
Yafeh, Yishay - 2010
This paper reviews the literature on corporate groups in Japan and elsewhere, and offers a comparison of Japan's corporate groups with groups in other developed and developing countries. It then proceeds to examine the evolution of corporate groups in Japan since the mid-1970s. The main...
Persistent link: https://www.econbiz.de/10012762884
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Business Groups and the Incorporation of Firm-Specific Shocks into Stock Prices
Faccio, Mara - 2019
In lower-income economies, stocks exhibit less idiosyncratic volatility and business groups are more prevalent. This study connects these two findings by showing that business group affiliated firms' stock returns exhibit less idiosyncratic volatility than do the returns of otherwise similar...
Persistent link: https://www.econbiz.de/10012869223