We examine whether business groups’ influence on cash holdings depends on ownership. Group affiliation can increase firms’ agency costs or benefit firms by providing an internal capital market, especially in transition economies characterized by weak investor protection and difficult...

Croatia has a transitional economy that contains conditions for the evolution of business groups. Business groups are legally independent firms that typically are joined by equity ownership, and co-ordinating their use of resources, such as capital and managerial labour. They have evolved and...