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Who controls East Asian corporations ?

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  • Claessens, Constantijn A.
  • Djankov, Simeon
  • Lang, Larry H. P.

Abstract

The authors identify the ultimate ownership structure for 2,980 corporations in nine East Asian countries. They find that: A) More than half of those firms are controlled be a single shareholder. B) Smaller firms and older firms are more likely to be family-controlled. C) Patterns of controlling ownership stakes differ across countries. The concentration of control generally diminishes with higher economic and institutional development. D) In many countries control is enhanced though pyramid structures and deviations from one-share-one-vote rules. As a result, voting rights exceed cash-flow rights. E) Management is rarely separated from ownership control, and management in two thirds of the firms that are not widely held is related to management of the controlling shareholder. F) In some countries, wealth is very concentrated and links between government andbusiness are extensive, so the legal system has probably been influenced by the prevailing ownership structure.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2054.

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Date of creation: 28 Feb 1999
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Handle: RePEc:wbk:wbrwps:2054

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Keywords: Small and Medium Size Enterprises; Microfinance; Small Scale Enterprise; International Terrorism&Counterterrorism; Economic Theory&Research; Microfinance; Private Participation in Infrastructure; Small Scale Enterprise; Rural Land Policies for Poverty Reduction; Economic Theory&Research;

References

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  1. Amsden, Alice H. & Singh, Ajit, 1994. "The optimal degree of competition and dynamic efficiency in Japan and Korea," European Economic Review, Elsevier, Elsevier, vol. 38(3-4), pages 941-951, April.
  2. Raghuram G. Rajan & Luigi Zingales, 1998. "Which Capitalism? Lessons Form The East Asian Crisis," Journal of Applied Corporate Finance, Morgan Stanley, Morgan Stanley, vol. 11(3), pages 40-48.
  3. Shleifer, Andrei & Vishny, Robert W., 1986. "Large Shareholders and Corporate Control," Scholarly Articles 3606237, Harvard University Department of Economics.
  4. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 1998. "Corporate Ownership Around the World," NBER Working Papers 6625, National Bureau of Economic Research, Inc.
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  7. Edita A. Tan, 1993. "Interlocking Directorates, Commercial Banks, Other Financial Institutions and Non-Financial Corporations," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 30(1), pages 1-50, June.
  8. Rodrik, Dani, 1997. "The 'paradoxes' of the successful state," European Economic Review, Elsevier, Elsevier, vol. 41(3-5), pages 411-442, April.
  9. Sato, Yuri, 1993. "The Salim Group in Indonesia: the development and behavior of the largest conglomerate in Southeast Asia," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 31(4), pages 408-441, December.
  10. Kaplan, Steven N, 1994. "Top Executive Rewards and Firm Performance: A Comparison of Japan and the United States," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(3), pages 510-46, June.
  11. Demsetz, Harold, 1986. "Corporate Control, Insider Trading, and Rates of Return," American Economic Review, American Economic Association, American Economic Association, vol. 76(2), pages 313-16, May.
  12. Prowse, Stephen D, 1992. " The Structure of Corporate Ownership in Japan," Journal of Finance, American Finance Association, American Finance Association, vol. 47(3), pages 1121-40, July.
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  14. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, Elsevier, vol. 20(1-2), pages 293-315, January.
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Citations

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Cited by:
  1. Driffield, Nigel & Pal, Sarmistha, 2008. "Evolution of Capital Structure in East Asia: Corporate Inertia or Endeavours?," IZA Discussion Papers 3426, Institute for the Study of Labor (IZA).
  2. Richard J. Herring & Nathporn Chatusripitak, 2000. "The Case of the Missing Market: The Bond Market and Why It Matters for Financial Development," Center for Financial Institutions Working Papers, Wharton School Center for Financial Institutions, University of Pennsylvania 01-08, Wharton School Center for Financial Institutions, University of Pennsylvania.
  3. Erik BERGLÖF & Ernst-Ludwig VON THADDEN, 1999. "The Changing Corporate Governance Paradigm : Implications for Transition and Developing Countries," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 9912, Université de Lausanne, Faculté des HEC, DEEP.
  4. Yves Bozec & Claude Laurin, 2004. "Concentration des droits de propriété, séparation entre participation au capital et contrôle des votes et performance opérationnelle des sociétés:une étude canadienne," Revue Finance Contrôle Stratégie, revues.org, revues.org, vol. 7(2), pages 123-164, June.
  5. Sami Basly, 2006. "Propriete, Decision Et Strategie De L'Entreprise Familiale : Une Analyse Theorique," Post-Print halshs-00192818, HAL.
  6. Luc E. Leruth & Yougesh Khatri & J. Piesse, 2002. "Corporate Performance and Governance in Malaysia," IMF Working Papers 02/152, International Monetary Fund.
  7. Intan Oviantari Author_Email: ioviantari@yahoo.com, 2011. "Directors And Commissioners Remuneration And Firm Performance: Indonesian Evidence," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding, Conference Master Resources 2011-287, Conference Master Resources.
  8. Wan-Hussin, Wan Nordin, 2009. "The impact of family-firm structure and board composition on corporate transparency: Evidence based on segment disclosures in Malaysia," The International Journal of Accounting, Elsevier, Elsevier, vol. 44(4), pages 313-333, December.
  9. Ferris, Stephen P. & Kim, Kenneth A. & Kitsabunnarat, Pattanaporn, 2003. "The costs (and benefits?) of diversified business groups: The case of Korean chaebols," Journal of Banking & Finance, Elsevier, Elsevier, vol. 27(2), pages 251-273, February.
  10. Gonzalez, Eduardo T. & Mendoza, Magdalena L., . "Governance in Southeast Asia: Issues and Options," Discussion Papers DP 2002-07, Philippine Institute for Development Studies.
  11. Adrian E. Tschoegl, 2004. "Financial Crises and the Presence of Foreign Banks," International Finance, EconWPA 0405016, EconWPA.
  12. Claudiu BOCEAN & Catalin M. BARBU, 2007. "Corporate Governance And Firm Performance," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, University of Craiova, Faculty of Economics and Business Administration, vol. 5(1), pages 125-131, November.

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