Risk Management and Corporate Governance in Imperfect Capital Markets

Klaus Fischer, Edgar Ortiz and A. P. Palasvirta
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Edgar Ortiz: Universidad Nacional Autónoma de México

Chapter 15 in The Changing Environment of International Financial Markets, 1994, pp 201-230 from Palgrave Macmillan

Abstract: Abstract Successful business in the developing countries has often evolved into complex industrial ‘groups’ – a sort of conglomerates. Although their accomplishments are often impressive, these firms have rarely become fully publicly owned corporations. Little or no common stock is sold, and ownership and control remains tightly held in a circle of family members and friends. We contend that such behaviour is a rational response to risk bearing by investors in the absence of arms length financial markets. It is an efficient market solution to uncertainty and political risk when efficient markets do not exist.

Keywords: Cash Flow; Capital Market; Financial Market; Efficient Market; Imperfect Market (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-23161-4_15

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DOI: 10.1007/978-1-349-23161-4_15

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