Using novel transaction-level data on Chinese business groups, this study provides the first direct evidence of the coinsurance theory of business groups, by investigating when different types of internal resources are transferred within a business group. We find that in Chinese business groups,...

Innovation activities create substantial firm value, but they are difficult to manage owing to agency risk which is commonly thought to result in shirking, hence underinvestment in innovation. However, agency risk can also create inefficient allocation of resources among innovation activities,...

Do investors with concentrated shareholding infringe on the value of more-fragmented shareholders ("parasites") or facilitate the growth of firm value for all shareholders ("paragons")? In a major ownership reform of Chinese listed firms, we obtain evidence which suggests that larger minority...