The Benefits and Costs of Group Affiliation: Evidence from East Asia

Stijn Claessens (), Joseph P. H. Fan and Larry H. P. Lang

No DP2002-47, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper investigates the benefits and associated agency costs of using internal capital markets through affiliating with groups using data of two thousand firms from nine East Asian economies between 1994-6. We find that mature and slow-growing firms with ownership structures more likely to create agency problems gain more from group affiliation, while young and high-growth firms more likely lose. Agency problems are important explanatory factors of firm value in economies outside Japan, but less so in Japan.

Keywords: Business enterprises; Business networks; Capital market; Finance (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (17)

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Related works:
Journal Article: The benefits and costs of group affiliation: Evidence from East Asia (2006)
Working Paper: The Benefits and Costs of Group Affiliation: Evidence from East Asia (2002)
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