Tunneling and Propping: A Justification for Pyramidal Ownership

Yohanes Riyanto and Linda A. Toolsema
Additional contact information
Linda A. Toolsema: Groningen University

No 04E29, Research Report from University of Groningen, Research Institute SOM (Systems, Organisations and Management)

Abstract: This paper presents a formal model of tunneling and propping in a pyramidal ownership structure. Tunneling refers to controlling shareholders shifting resources from one firm to another in the same pyramid. Propping is tunneling that is done to save the receiving firm from bankruptcy. We compare the pyramidal ownership structure to the horizontal ownership structure, in which shifting resources between firms is not possible (i.e. illegal). We show that tunneling may justify the pyramidal structure only in the presence of myopic investors or in combination with propping

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://irs.ub.rug.nl/ppn/277140862 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://irs.ub.rug.nl/ppn/277140862 [302 Found]--> https://irs.ub.rug.nl/ppn/277140862 [302 Found]--> https://www.rug.nl/research/portal/publications/pub(f3d99806-d160-4f4d-a9ee-bbe31bbe1ca4).html [301 Moved Permanently]--> https://research.rug.nl/en/publications/pub(f3d99806-d160-4f4d-a9ee-bbe31bbe1ca4).html [301 Moved Permanently]--> https://research.rug.nl/en/publications/tunneling-and-propping-a-justification-for-pyramidal-ownership-2)

Related works:
Journal Article: Tunneling and propping: A justification for pyramidal ownership (2008)
Working Paper: Tunneling and Propping: A Justification for Pyramidal Ownership (2004)
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:gro:rugsom:04e29

Access Statistics for this paper

More papers in Research Report from University of Groningen, Research Institute SOM (Systems, Organisations and Management) Contact information at EDIRC.
Bibliographic data for series maintained by Hanneke Tamling ().