EconPapers    
Economics at your fingertips  
 

Ferreting out Tunneling: An Application to Indian Business Groups

Marianne Bertrand, Paras Mehta and Sendhil Mullainathan

The Quarterly Journal of Economics, 2002, vol. 117, issue 1, 121-148

Abstract: Owners of business groups are often accused of expropriating minority shareholders by tunneling resources from firms where they have low cash flow rights to firms where they have high cash flow rights. In this paper we propose a general methodology to measure the extent of tunneling activities. The methodology rests on isolating and then testing the distinctive implications of the tunneling hypothesis for the propagation of earnings shocks across firms within a group. When we apply our methodology to data on Indian business groups, we find a significant amount of tunneling, much of it occurring via nonoperating components of profit.

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (587)

Downloads: (external link)
http://hdl.handle.net/10.1162/003355302753399463 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Ferreting Out Tunneling: An Application to Indian Business Groups (2000) Downloads
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:oup:qjecon:v:117:y:2002:i:1:p:121-148.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva

More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2025-03-22
Handle: RePEc:oup:qjecon:v:117:y:2002:i:1:p:121-148.