Economics at your fingertips  

Pyramiding vs leverage in corporate groups: International evidence

Mara Faccio (), Larry HP Lang and Leslie Young
Additional contact information
Larry HP Lang: The Chinese University of Hong Kong, Hong Kong, China

Journal of International Business Studies, 2010, vol. 41, issue 1, 88-104

Abstract: Among firms listed in Western Europe and East Asia, when creditor protection is strong, the controlling shareholder trades off retaining control in bad states through pyramiding against retaining the upside in good states via leverage. This result might arise because the controlling shareholder uses both leverage and pyramiding to expand control of resources, but in different circumstances since they have different outcomes under downside shocks. When creditor protection is weak, the controlling shareholder no longer prefers pyramiding in bad states, because creditors will not be able to seize the firm in bad states. Therefore pyramiding and leverage are used together.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link) Link to full text PDF (application/pdf) Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

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:

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2019-10-02
Handle: RePEc:pal:jintbs:v:41:y:2010:i:1:p:88-104