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How Does Ownership Structure Affect Capital Structure and Firm Value? Recent Evidence from East Asia

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Author Info
Nigel Driffield
Sarmistha Pal ()

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Abstract

The present paper examines the effects of ownership structures on capital structure and firm valuation and argues that the effects of separation of control from cash flow rights on capital structure and firm value also depend on the separation of control from management as well as legal rules and enforcement defining investors’ protection. We obtain firm-level panel data 3SLS estimates from four East Asian countries worst affected by the last Crisis. There is evidence that the general wisdom that higher control than cash flow rights may lower firm value may be reversed among owner-managed family firms in the sample countries.

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Publisher Info
Paper provided by Centre for Economic Development and Institutions(CEDI), Brunel University in its series CEDI Discussion Paper Series with number 07-04.

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Length: 25 pages
Date of creation: Feb 2007
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Handle: RePEc:edb:cedidp:07-04

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  31. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000. "Investor protection and corporate governance," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 3-27. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Nigel Driffield & Sarmistha Pal, 2008. "Evolution of Capital Strcture in East Asia: Corporate Inertia or Endeavours?," CEDI Discussion Paper Series 08-04, Centre for Economic Development and Institutions(CEDI), Brunel University. [Downloadable!]
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