This article disentangles the incentive and entrenchment effects of large ownership. Using data for 1,301 publicly traded corporations in eight East Asian economies, we find that firm value increases with the cash-flow ownership of the largest shareholder, consistent with a positive incentive...

In nine East Asian countries, higher cash-flow rights are associated with a higher market valuation and higher control rights with a lower valuation, especially when cash-flow rights are low and control rights are high. This suggests the expropriation of minority shareholders by controlling...

Some East Asian firms diversify to circumvent external factor markets subject to high transaction costs. Other diversify as a means of expropriation by large stockholders. There is evidence that group affiliation is used to complement firm-level diversification in the creation of internal...

This paper investigates the benefits and associated agency costs of using internal capital markets through affiliating with groups using data of two thousand firms from nine East Asian economies between 1994-96. We find that mature and slow-growing firms with ownership structures more likely to...

We examine the separation of ownership and control for 2,980 corporations in nine East Asian countries. In all countries, voting rights frequently exceed cash-flow rights via pyramid structures and cross-holdings. The separation of ownership and control is most pronounced among family-controlled...

We examine the efficiency of investment by diversified firms in nine East Asian countries, using a unique data of more than 10,000 firms over the 1991-96 period. We document the degree of diversification in the corporate sector, distinguish between vertical and complementary diversification, and...