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Governance and Expropriation

Edited by Larry H.P. Lang, Chair Professor of Finance, Department of Finance, Chinese University of Hong Kong
Corporate groups outside the US are often controlled by a complex of ownership links, which typically form a pyramidal structure: a private holding company sits at the top of a control pyramid of several tiers of companies; firms in the lowest tier are the group’s publicly listed companies. The usual practice of expropriation in such groups is to pass bad assets to companies down the pyramid and to pass the proceeds up the pyramid via internal transactions.
Extent: 496 pp
Hardback Price: $259.00 Web: $233.10
Publication Date: 2005
ISBN: 978 1 84542 374 2
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  • Economics and Finance
  • Corporate Governance
  • Law - Academic
  • Corporate Law and Governance
Corporate groups outside the US are often controlled by a complex of ownership links, which typically form a pyramidal structure: a private holding company sits at the top of a control pyramid of several tiers of companies; firms in the lowest tier are the group’s publicly listed companies. The usual practice of expropriation in such groups is to pass bad assets to companies down the pyramid and to pass the proceeds up the pyramid via internal transactions.

For this collection Larry Lang has selected some of the most significant previously published articles by leading academics which investigate this process and its consequences. The volume explores the nature of ownership structure in countries outside the US and examines how controlling owners expropriate minority shareholders. It includes articles which analyse the pros and cons of the various finance and accounting issues resulting from this separation of ownership and control, and presents some country-specific studies which examine the impact of this disjunction.

The editor has written an authoritative introduction which provides explanatory information and points the way for future research in this area.
15 articles, dating from 1999 to 2004
Contributors include: K.H. Bae, M. Bertrand, S. Claessens, S. Djankov, M. Faccio, J.P.H. Fan, S.W. Joh, R. La Porta, A. Shleifer, Y.H. Yeh
Contents:
Acknowledgements
Introduction Larry H.P. Lang
PART I NEW EVIDENCE OF THE OWNERSHIP STRUCTURE AROUND THE WORLD
1. Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer (1999), ‘Corporate Ownership Around the World’
2. Stijn Claessens, Simeon Djankov and Larry H.P. Lang (2000), ‘The Separation of Ownership and Control in East Asian Corporations’
3. Mara Faccio and Larry H.P. Lang (2002), ‘The Ultimate Ownership of Western European Corporations’
PART II EXPROPRIATION OR TUNNELING
4. Mara Faccio, Larry H.P. Lang and Leslie Young (2001), ‘Dividends and Expropriation’
5. Simon Johnson, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer (2000), ‘The Near Crash of 1998: Tunneling’
PART III VALUE, INFORMATION AND THE SEPARATION OF OWNERSHIP FROM CONTROL
6. Stijn Claessens, Simeon Djankov, Joseph P.H. Fan and Larry H.P. Lang (2002), ‘Disentangling the Incentive and Entrenchment Effects of Large Shareholdings’
7. Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer and Robert Vishny (2002), ‘Investor Protection and Corporate Valuation’
8. Karl V. Lins (2003), ‘Equity Ownership and Firm Value in Emerging Markets’
9. Joseph P.H. Fan and T.J. Wong (2002), ‘Corporate Ownership Structure and the Informativeness of Accounting Earnings in East Asia’
PART IV COUNTRY STUDIES OF IMPACT OF SEPARATION OF OWNERSHIP FROM CONTROL
10. Marianne Bertrand, Paras Mehta and Sendhil Mullainathan (2002), ‘Ferreting out Tunneling: An Application to Indian Business Groups’
11. Kee-Hong Bae, Jun-Koo Kang and Jin-Mo Kim (2002), ‘Tunneling or Value Added? Evidence from Mergers by Korean Business Groups’
12. Sung Wook Joh (2003), ‘Corporate Governance and Firm Profitability: Evidence from Korea before the Economic Crisis’
13. Kenneth A. Kim, Pattanaporn Kitsabunnarat and John R. Nofsinger (2004), ‘Ownership and Operating Performance in an Emerging Market: Evidence from Thai IPO Firms’
14. Yupana Wiwattanakantang (2001), ‘Controlling Shareholders and Corporate Value: Evidence from Thailand’
15. Yin-Hua Yeh, Tsun-Siou Lee and Tracie Woidtke (2001), ‘Family Control and Corporate Governance: Evidence from Taiwan’
Name Index