Profit redistribution in family-controlled, group-affiliated publicly - Listed corporations in Malaysia

Sin Huei, Ng, Shrives, Philip and Ken Kyid, Yeoh (2013) Profit redistribution in family-controlled, group-affiliated publicly - Listed corporations in Malaysia. Corporate Ownership and Control, 10 (3). pp. 250-271. ISSN 1727-9232

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Abstract

This paper attempts to examine the potential occurrence of profit redistribution in family-controlled business groups in Malaysia. It is argued that there exists a tendency for business groups with extensive family ownership and control to redistribute resources from group affiliates that outperformed to affiliates that underperformed. This phenomenon is prevalent particularly in large business groups where the link between business groups and politics is most clearly displayed. Such "propping up? activities are believed to adversely affect the shareholders of the outperforming affiliates as the performance of these affiliates diminishes due to the profit redistribution. They also result in inefficient allocation of resources within the business group, though it is found that higher board independence may reduce such inefficiency.

Item Type: Article
Uncontrolled Keywords: board independence, expropriation of minority shareholders, family-controlled business groups, profit redistribution, Tobin's Q
Subjects: N100 Business studies
Department: Faculties > Business and Law > Newcastle Business School > Business and Management
Depositing User: Becky Skoyles
Date Deposited: 19 Jan 2015 11:32
Last Modified: 10 Aug 2015 10:57
URI: http://nrl.northumbria.ac.uk/id/eprint/20805

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