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Small business groups enhance performance and promote stability, not expropriation. Evidence from French SMEs

  • Hamelin, Anaïs

This paper investigates the influence that a firm's distance from control has on its performance, using balance sheet information and a unique data set on small business ownership. This study fills a gap in the empirical governance literature by investigating whether there is expropriation of minority shareholders in small business groups. Contrary to observations for large business groups, results show a positive relationship between the separation of control from ownership and firm performance. Results also underline that tunneling promotes controlling shareholders' profit stability rather than profit maximization in small business groups.

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Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 35 (2011)
Issue (Month): 3 (March)
Pages: 613-626

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Handle: RePEc:eee:jbfina:v:35:y:2011:i:3:p:613-626
Contact details of provider: Web page: http://www.elsevier.com/locate/jbf

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  15. Lins, Karl V., 2003. "Equity Ownership and Firm Value in Emerging Markets," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 159-184, March.
  16. Dow, Sandra & McGuire, Jean, 2009. "Propping and tunneling: Empirical evidence from Japanese keiretsu," Journal of Banking & Finance, Elsevier, vol. 33(10), pages 1817-1828, October.
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