Corporate group

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

Revisiting Executive Pay in Family-Controlled Firms

Abstract: According to the prior literature, family executives of family-controlled firms receive lower compensation than non-family executives. One of the key driving forces behind this is the existence of family members who are not involved in management, but own significant fraction of shares and closely monitor and/or discipline those involved in management. In this paper, we show that this assumption falls apart if family-controlled firm is part of a large business group, where most of the family members take managerial positions but own little equity stakes in member firms. Using 2014 compensation data of 564 executives in 368 family-controlled firms in Korea, we find three key results consistent with our prediction First, family executives are paid more than non-family executives (by 27% more, on average) and this family premium is pronounced in larger business group firms even after controlling for potential selection bias problems. Second, pay to family-executives falls with the influence of outside family members (their aggregate ownership in the firm minus the ownership held by the family executive in the same firm). Third, family premium in large business group firms rises with group size, but falls with family’s cash flow rights. It also rises for group chairs, but falls with the number of board seats the family-executive holds within the group.

Anti-monopoly Policy and New System of Large Corporate Groups inGermany after World War II

Abstract: This paper discusses competition policy, in particular anti-monopoly policy and the development of a new system of industrial concentration in Germany after World War II. When examining industrial concentration in Germany, the cooperative mechanisms for corporations are the most characteristic manifestation of corporate group systems. Large corporate group systems evolved during the dissolution and reconcentration of monopolies after the war. Antimonopoly policy influenced new developments in the system of large corporate groups. Therefore, this paper discusses anti-monopoly policy and the restructuring of a system for large corporate groups. It first examines influence of the US occupation policy on monopolies in relation to monopoly deconcentration policy and antimonopoly policy in Germany. Next it analyzes anti-monopoly policy reform. Furthermore, it considers the restructuring of corporate group systems in relation to the dissolution of monopolies under the occupation policy and their reconcentration in the latter half of the 1950s. Drawing on this discussion, how large business operations were restructured through reconcentration or concentration, and how, as a result, divisions of labor in business domains developed in response to oligopolistic competition will be clarified.

Indian Software Capital: Sociography of a New Entrepreneurial Elite

Abstract: The aim of this article is to study Indian software capital considered as the nexus of IT companies and their top managers. For this purpose, we have conducted a Multi Correspondence Analysis of a set of data collected for the first hundred IT firms listed on the National Stock Exchange in Mumbai in 2012. We address three main research questions. Firstly, what is the socio-demographic profile of these entrepreneurs, secondly, what is the shareholding pattern of these companies and their position on the IT market and, lastly, what are the differences between these IT companies and traditional business groups? Although the managers are highly educated and share the same technical culture, the results show a clear division of software capital in 3 clusters. First, the Multinational companies, which are the oldest firms and the biggest in terms of manpower and global revenue, are opposed to a second group of IT companies founded or managed by executives who are mainly graduates, and whose activities are oriented towards the domestic market; lastly, a third group of companies run by highly-qualified managers (with MBAs) combined characters of clusters 1 and 2, but are smaller companies more dependent on the stock-market. In the software industry, the family-business model, which is not specifically related to the merchant high castes, is well represented, except for the Indian MNCs, but with some qualifications.

Do Chinese business groups have better innovation performance

Abstract: Whether business groups in emerging markets are paragons or parasites is a hot topic. We focus on whether latecomer firms in China can promote their innovation performance through setting up business groups. Combining institutional theory with innovation search theory, we propose that the focused firm affiliated to a business group (i.e. administrative firm, core firm, close to core firm, and peripheral firm) has lower innovation performance. Moreover, absorptive capacity and Research & Development (R&D) alliance intensity moderate these effects. Two studies in China support our arguments.

Mergers, Innovation, and Productivity: Evidence from Japanese manufacturing firms

Abstract: We investigate the impact of merger on innovation and efficiency using a micro dataset of Japanese manufacturing firms including unlisted firms during the period of 1995-1999. We find that the acquirer's total factor productivity (TFP) decreases immediately after mergers and does not significantly recover to the pre-merger level within three years after mergers. We also find that the R&D intensity does not significantly change after mergers in spite of a significant increase in the debt-to-asset ratio. Our results suggest that the costs of business integration are large and persistent. To take into considering large integration costs, we also analyze the post-merger performance from one year after mergers, finding no significant increase in TFP or R&D intensity up to three years after mergers. Given the heterogeneity of mergers, we analyze the post-merger performance by classifying merger types. We find that the recovery of TFP after mergers is significant for mergers across industries or within the same business group, suggesting that a synergy effect works well and integration costs are small for those types of mergers.