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Corporate Governance and Tunneling: Empirical Evidence from Turkey

Author

Listed:
  • Elif Akben Selcuk

    (Kadir Has University)

  • Pinar Sener

    (EDC Paris Business School, OCRE-Lab)

Abstract

This study investigates whether internal governance mechanisms affect tunneling through intercorporate loans for a sample of Turkish listed non-financial firms over the period 2006 to 2014. While the findings reveal a significant and positive relationship between state ownership and tunneling and a significant and negative relationship between foreign ownership and tunneling, the relationship between family ownership and tunneling is non-linear. In addition, while board size is negatively associated with tunneling, independent directors do not prevent the embezzlement of resources. Furthermore, the results indicate that while older firms, firms with family chairman and higher growth opportunities are more likely to engage in tunneling activities, firm size, high cash holding, leverage and financial distress do not affect tunneling.

Suggested Citation

  • Elif Akben Selcuk & Pinar Sener, 2018. "Corporate Governance and Tunneling: Empirical Evidence from Turkey," Economics Bulletin, AccessEcon, vol. 38(1), pages 349-361.
    • Handle: RePEc:ebl:ecbull:eb-17-00918
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    References listed on IDEAS

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    Cited by:

    1. Liew, Chee Yoong & Devi, S.Susela, 2020. "Independent Directors’ Tenure, Expropriation, Related Party Transactions, and Firm Value: The Role of Ownership Concentration in Malaysian Publicly Listed Corporations," MPRA Paper 99705, University Library of Munich, Germany.
    2. Hafezali Iqbal Hussain & Azlan Ali & Hassanudin Mohd Thas Thaker & Mohsin Ali, 2019. "Firm Performance and Family Related Directors: Empirical Evidence from an Emerging Market," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 13(2), June.
    3. Ramzi Benkraiem & Amal Hamrouni & Anthony Miloudi & Ali Uyar, 2018. "Access to Finance for French Firms: Do boardroom attributes matter?," Economics Bulletin, AccessEcon, vol. 38(3), pages 1267-1278.
    4. Shah, Muhammad Hashim & Xiao, Zuoping & Abdullah,, 2023. "Internal pyramid structure, judicial efficiency, firm-level governance and dividend policy," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 764-785.
    5. Shah, Muhammad Hashim & Xiao, Zuoping & Abdullah, & Quresh, Shakir & Ahmad, Mushtaq, 2020. "Internal pyramid structure, contract enforcement, minority investor protection, and firms’ performance: Evidence from emerging economies," Research in International Business and Finance, Elsevier, vol. 52(C).

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    More about this item

    Keywords

    Tunneling; corporate governance; firm characteristics; emerging market; panel data;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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