We investigate the relation of board structure through the appointments of outside directors and the role of busy directors on firm return on assets within an environment of no regulation for privately held firms and voluntary adoption of corporate best practices for security issuers with family...

This paper offers a new perspective on why business groups are formed. Specifically, we ask if the expectation of a government bailout lowers group-affiliated firms’ cost of capital. Using a quasi-natural experiment, we show that group-affiliated firms paid lower interest when a government...

Equity ties between businesses change the division of the firms joint profits, thereby affecting incentives for relation-specific investments and other strategic actions. Depending on which side owns the equity and how readily the equity can be resold, we find that the changed incentives can...

We suggest a unified framework to explain the following stylized pattern in the development of contractual governance and industrial organization. Contractual governance in many emerging economies is characterized by relational contracting. Coincident with relational contracts are large,...

We propose a framework for understanding the business group, a hybrid organizational form that occupies the middle ground between firm and market and is a prominent feature of emerging economies. These organizations are characterized by varying levels of diversification and integration. We...

This paper analyzes how group lending programs use joint liability to utilize localinformation that borrowers have about each other’s projects through self-selection of groupmembers in the group formation stage. These schemes are shown to lead to positiveassortative matching in group...