Business Group Affiliation and Investment Efficiency: International Evidence

Siwen Fu and Jeong‐Bon Kim

Accounting and Finance, 2025, vol. 65, issue 3, 3004-3023

Abstract: We examine the effect of business group affiliation on firm‐level investment efficiency using an international sample. Prior research has investigated both the benefits and drawbacks of this form of ownership structure. We first document that group affiliates are more efficient in their investment decisions than standalones by constraining both over‐investment and under‐investment. Moreover, this internal capital allocation matters more in countries with high external financing restrictions and less developed capital markets. Analysis at the business group level reveals that this relation is more pronounced for member firms in a pyramidal structure group and located in the lower layer.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/acfi.70028

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:acctfi:v:65:y:2025:i:3:p:3004-3023

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0810-5391

Access Statistics for this article

Accounting and Finance is currently edited by Robert Faff

More articles in Accounting and Finance from Accounting and Finance Association of Australia and New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().