Corporate group

About: Corporate group is a research topic. Over the lifetime, 1747 publications have been published within this topic receiving 46868 citations.

Business Coevolution: Considerations from the Mobile Telecommunication Sector in Latin America Economy

Abstract: The dynamic and interaction between companies and the environment leads to atypical emergences addressed by the strategic business direction mainstream. In this document the introduction of CoEvolutionary Relationships is presented to explain how some groups of companies that are facing business turbulence, not only survive, but grow rapidly in an internal dynamic space and transformational environment, becoming an attractive investment option. To explain this phenomenon, the field of mobile telecommunications in Colombia is studied, applying a mixed methodology that includes semi-structured interviews and the analysis of documentary content (ADC). The findings reflect a structural link between a turbulent environment and a group of companies that developed growth in their sector despite the turmoil.

Corporate Family Matters

Abstract: Corporate groups dominate the American economy. Known publicly by a single name—Chevron, Apple, McDonald’s, or Google—these companies are a web of affiliated entities, each with its own separate legal identity. Yet, corporate laws have failed to develop a statutory scheme that acknowledges these relationships among entities. While corporate personhood, separateness, and the accompanying liability protection are the primary reasons for using the corporate form, or business entities in general, form can be exploited by bad actors who seek to take advantage of the natural legal silos that define each legal entity in a corporate group as a stand-alone person. These legal silos enable bad actors to hide in plain sight, or to give the perception of a full disclosure without consequence, making some of the most egregious conduct either fraud that is difficult to unravel or behavior that is disturbing but legal. This oversight leaves the system vulnerable to market manipulation through complex business structure. As a result, consumers and investors, many concerned with corporate social responsibility and impact investing, and motivated to do business with companies that support their social causes, can be manipulated into investing and spending by the silos and veils of separateness. When individuals act in a way that defrauds the market or causes harm, criminal law, securities law, and even tort and contract law provide remedies. When companies manipulate the market across business sectors, the antitrust laws intervene. When an individual corporation manipulates the market or engages in fraud, shareholder derivative litigation in conjunction with securities regulation provide a remedy. What is missing is a solution for market manipulation using corporate groups, and in particular, the corporate family. A system is needed for acknowledging entities that work for a common good, as the current structure enables these entities to manipulate what is known to investors and consumers for purposes of altering stock price, either intentionally or incidentally. This approach is the first to distinguish corporate groups by merging substantive corporate law with procedural protocols. This Article proposes a definition and governance regime for a particular type of corporate group—the corporate family. It defines the family as an enterprise formed by weaving corporations, partnerships, and LLCs together into a mix of public and private entities acting for the benefit of a parent corporation or for the personal gain of one or more leaders of the enterprise. A corporation should be treated like a family when (1) there is more than one entity with shared ownership or management, or when an entity is wholly owned by another entity, and (2) that entity operates for the promotion of the parent’s business purposes or the manager or owner’s business interests. When businesses meet the standard for corporate family treatment, they are required to acknowledge influence and look to the real party in interest when determining what is material, what should be reported to shareholders, and conflicts of interest. This proposed corporate family structure acknowledges influence, while maintaining principles of corporate personhood by taking a procedural approach to determining when an entity should be deemed a family. To disregard all groups and in particular families leaves a gap in the regulatory regime that is easy to manipulate and exploit. By acknowledging influence and treating applicable corporations as a family, the market can gain a clearer and more accurate picture of business operations.

Is Business Group Structure Inefficient? A Long-Term Perspective

Abstract: This paper investigates the long-term value implication of business group affiliation. In order to secure comparability between business-group-affiliated firms and independent firms we employ the matching estimator technique, which selects firms with business characteristics most similar to chaebol firms to create a control group of firms. We find that the long-term performance of chaebol-affiliated firms is superior to that of control firms although the two groups are very similar at the beginning of the sample period. The differential performance between the two groups has been caused by changes in firm characteristics over time. Difference-in-difference estimators on important firm characteristics indicate that, over time, chaebol-affiliated firms become larger and more profitable, grow faster with more investments, have higher debt, and have more foreign ownership, which leads to a larger firm size. Chaebol firms also seem to benefit from tax shield and monitoring effects due to a higher level of debt, and avoid the entrenchment of owner–managers with a higher foreign ownership. However, regressions using difference variables indicate that business group affiliation by itself is not a value-increasing event.

Accounting for goodwill on consolidation

Abstract: The issue of accounting for goodwill has caused considerable concern to accountants and academics. For over 100 years there has been diversity of views as to the nature, recognition and measurement of goodwill. Such diversity of views has contributed to the adoption of a variety of accounting practices for goodwill, which has lead to attempts to regulate practice by accounting professions in the Anglo-American world. The research conducted involves a literature review to identify the concepts and definition of goodwill and the criteria for its recognition and measurement. the investigation will then concentrate upon goodwill arising on consolidation of the financial statements of a group of companies. Major accounting practices will be examined, along with the requirements of the australian and mojor overseas professions on the issue. The findings of a study of listed Australian companies which investigated the accounting policies adopted for goodwill on consolidation before and after regulation of the issue and which sought views upon some of the conceptual issues involved are reported and discussed. Implications of the research for the Australian accounting profession will be addressed, and recommendations will be propsed together with a description of future research opportunities.