Principal-principal conflicts during crisis
نویسندگان
چکیده
This paper explores principal-principal conflicts in corporate governance during times of economic crisis. We address the question: What external and internal governance mechanisms can best protect minority shareholders? Drawing on 877 publicly listed large corporations with concentrated ownership in seven Asian countries and regions, we compare different control structures between family firms and non-family firms during crisis. We find that family firms tend to choose certain control structures associated with potential principal-principal conflicts. However, these choices can be constrained by external and internal governance mechanisms. Specifically, legal institutions and presence of multiple blockholders serve as useful external and internal governance mechanisms, respectively, to constrain potential expropriation of minority shareholders.
منابع مشابه
Financial crisis and the dynamics of corporate governance: Evidence from Taiwan's listed firms
Available online 24 January 2014 This study complements the governance literature by investigating how Taiwan listed firms adjusted their governance structure to cope with the 2008 financial crisis. The results from the principal component analysis (PCA) suggest that there are significant differences in the factor scores, such as Board Power (of the Largest Shareholders), Information Transparen...
متن کاملReview Paper Corporate Governance in Emerging Economies: A Review of the Principal–Principal Perspective
Instead of traditional principal–agent conflicts espoused in most research dealing with developed economies, principal–principal conflicts have been identified as a major concern of corporate governance in emerging economies. Principal–principal conflicts between controlling shareholders and minority shareholders result from concentrated ownership, extensive family ownership and control, busine...
متن کاملEnhancing Efficiency of Neural Network Model in Prediction of Firms Financial Crisis Using Input Space Dimension Reduction Techniques
The main focus in this study is on data pre-processing, reduction in number of inputs or input space size reduction the purpose of which is the justified generalization of data set in smaller dimensions without losing the most significant data. In case the input space is large, the most important input variables can be identified from which insignificant variables are eliminated, or a variable ...
متن کاملThe Efficacy of Acceptance and Commitment Therapy(ACT) on Marital Conflicts and Improvement of Intimacy in Divorce Applicant Couples
Introduction: Malfunction in intimacy and marital conflicts have always been considered as one of the principal reasons for couples’ divorce. This study aimed to determine the efficacy of acceptance and commitment therapy (ACT) on marital conflicts and improvement of intimacy in divorce applicant couples. Methods: This study was quasi-experimental with a pretest, posttest, and control group. Th...
متن کاملInadequacy of nation-based and VaR-based safety nets in the European Union
Considered as a social contract, a financial safety net imposes duties and confers rights on different sectors of the economy. Within a nation, elements of incompleteness inherent in this contract generate principal-agent conflicts that are mitigated by formal agreements, norms, laws, and the principle of democratic accountability. Across nations, additional gaps emerge that are hard to bridge....
متن کامل