Corporate group

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

The Unthinkable Policy Option? Key Design Issues Under a System of Full Consolidation

Abstract: In 2010, Canada’s Department of Finance initiated a consultation process to consider the possible introduction of a formal corporate group taxation system. A principal focus of the consultation process has been the type of group taxation system that would be best for Canada. The two most common alternatives that have been adopted in other countries are the loss transfer and full consolidation systems. The choice between these two systems is a difficult one. Nevertheless, provincial interest in a full consolidation regime is evident, especially as a means to address the interprovincial allocation issue.The purpose of this article is to provide an in-depth comparative analysis of the consolidation regimes adopted in eight countries: Australia, France, Italy, Japan, the Netherlands, New Zealand, Spain, and the United States. These are the countries that, by the end of 2009, had introduced full consolidation regimes providing for both intragroup loss offsets and tax-free asset transfers. The article critically compares the alternative policy options with respect to the design features and key structural elements of the eight selected consolidation regimes in an attempt to identify a model regime or template that might serve as a starting point for a Canadian system. In response to concern about the perceived complexity of a consolidation regime, the article ranks the eight consolidation regimes by applying a complexity index. This exercise is designed to highlight two aspects of the issue: first, the eight regimes represent a spectrum of varying degrees of complexity, indicating that a consolidation regime need not be as complex as the Australian and US models; and second, the complexity of a regime depends to a large extent on the policy choices with respect to the key structural elements.

Group affiliation and corporate debt maturity: Co-insurance or expropriation

Abstract: PurposeWe examine how business group affiliation affects corporate debt maturity.Design/methodology/approachThis study employs the financial data of all listed Indian companies obtained from the CMIE database for 2011–2018. The ordinary least square, firm-fixed effect and Fama–Macbeth regression methods are used for empirical analysis. We use propensity score matching and difference-in-difference method to address endogeneity issues. Further, two-stage least square (2SLS) regression is performed to mitigate the endogeneity that stems from simultaneity between debt maturity and leverage.FindingsUsing Indian firms, we report that group affiliation is positively associated with corporate debt maturity; group firms use more long-term debt compared to similar standalone firms. We also observe that the positive effect of group affiliation on debt maturity is more pronounced in business group firms associated with a group having more resources and having unrelated diversification. However, information asymmetry and moral hazard problems weaken the impact of group affiliation on debt maturity structure of a firm. Overall, our results are consistent with co-insurance benefits that are an argument for the presence of business groups in emerging markets.Originality/valueThis study contributes to the existing literature by testing the role of group affiliation on corporate debt maturity decisions in the Indian market context where market imperfections persuade firms to borrow from banks. This is also the first study on determinants of corporate debt maturity that distinguishes between public and private debt.

State Controlling Shareholders and Payout Policy

Abstract: We study the role of state controlling shareholders in corporate payout policy. We exploit as an exogenous event the State Capital Operation Program in China under which parent central state-owned enterprises (parent CSOEs) are required to partially contribute their income to a fiscal fund. We find that, upon the inception of the program, listed central state-owned enterprises (listed CSOEs) controlled by these parent CSOEs experience a significant reduction in dividend payouts. The reduction in dividend payouts is concurrent with an increase in intra-group capital flows: listed CSOEs’ loans to group peers and their commercial purchases from group peers. We conclude by showing that the payout reduction tends to be explained by parent CSOE managers’ career concerns and that such reduction hurts minority shareholders’ interests, manifested in a loss of firm value.

A Case Study Approach for Developing Supply Chain Management Models

Abstract: This descriptive analysis exemplifies various events in sequence to design conceptual Supply Chain Management (SCM) model for JMI Group in order to explain different functions under SCM department. JMI Group, one of the prominent and diversified universal corporations in Bangladesh, was established in April 1999 and comprised of 12 subsidiary enterprises covering both manufacturing and service industries. Its SCM organization is framed based on primary data, i.e. interviewing top management, other stakeholders and secondary data like official documents, internal reports, websites, books, journals, conferences, etc. This paper develops conceptual structure for JMI group, principally a holistic view, simplified models for individual company and integrated models signifying manufacturing process and service process. The individual models exemplify distinct supply chain management for all the subsidiary companies. Each framework methodically establishes suppliers in terms of internal and external, process through the manufacturing and service industries, customers, i.e. internal and external, and finally the end users. The integrated models illustrate that the subsidiary companies of JMI Group are interlinked with each other through complex networks in terms of either internal supplier or internal customer either as manufacturing or service industry. These suggested models would be appropriate towards all other group of companies in developing countries those intend to put into practice modern supply chain management perception into the business. This case study would expose the additional frontiers for potential researchers as well as practitioners to pursue research on SCM for the conglomerates locally and internationally as well as to implement model for real life application respectively.