Abstract

http://ssrn.com/abstract=1719335
 
 

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Expropriation of Minority Shareholders in Politically Connected Firms


Meijun Qian


National University of Singapore

Hongbo Pan


Wuhan University

Bernard Yin Yeung


National University of Singapore - Business School

November 10, 2010

Finance and Corporate Governance Conference 2011 Paper

Abstract:     
The conflict of interests between controlling and minority shareholders is an important issue in firms with concentrated ownership. We document that the controlling shareholders’ expropriation behavior through tunneling or self-dealing is much severer in politically connected firms. The results are not due to firms with high tendency of expropriation establishing connection for protection, but because of a less concern of capital market punishment. We show that expropriation is severer only in firms whose political connection secures bank loan access. These findings are consistent with the view that the firms’ financing condition is an important dimension that influences corporate governance.

Number of Pages in PDF File: 37

Keywords: ownership concentration, expropriation, political connection, external financing

JEL Classification: G32, G34

working papers series





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Date posted: December 4, 2010 ; Last revised: February 15, 2011

Suggested Citation

Qian, Meijun and Pan, Hongbo and Yeung, Bernard Yin, Expropriation of Minority Shareholders in Politically Connected Firms (November 10, 2010). Finance and Corporate Governance Conference 2011 Paper. Available at SSRN: http://ssrn.com/abstract=1719335 or http://dx.doi.org/10.2139/ssrn.1719335

Contact Information

Meijun Qian (Contact Author)
National University of Singapore ( email )
1 Business Link
Singapore, 117592
Singapore
Hongbo Pan
Wuhan University ( email )
Wuhan
China
Bernard Yin Yeung
National University of Singapore - Business School ( email )
1 Business Link
Biz 2 Building Level 6
Singapore 117592
Singapore
65 6516 3075 (Phone)
65 6779 1365 (Fax)
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