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http://ssrn.com/abstract=227602
 
 

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Tunnelling


Simon Johnson


Massachusetts Institute of Technology (MIT) - Entrepreneurship Center; National Bureau of Economic Research (NBER)

Rafael La Porta


Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

Florencio Lopez de Silanes


EDHEC Business School; National Bureau of Economic Research (NBER); Tinbergen Institute

Andrei Shleifer


Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

February 2000

NBER Working Paper No. w7523

Abstract:     
Tunnelling is defined as the transfer of assets and profits out of firms for the benefit of their controlling shareholders. We describe the various forms that tunnelling can take, and examine under what circumstances it is legal. We discuss two important legal principles -- the duty of care and the duty of loyalty -- which courts use to analyze cases involving tunnelling. Several important legal cases from France, Belgium, and Italy illustrate how and why the law accommodates tunnelling in civil law countries, and why certain kinds of tunnelling are less likely to pass legal scrutiny in common law countries.

Number of Pages in PDF File: 14

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Date posted: June 11, 2000  

Suggested Citation

Johnson, Simon and La Porta, Rafael and Lopez de Silanes, Florencio and Shleifer, Andrei, Tunnelling (February 2000). NBER Working Paper No. w7523. Available at SSRN: http://ssrn.com/abstract=227602

Contact Information

Simon Johnson (Contact Author)
Massachusetts Institute of Technology (MIT) - Entrepreneurship Center ( email )
United States
617-253-8412 (Phone)
617-258-6855 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Rafael La Porta
Dartmouth College - Tuck School of Business ( email )
Hanover, NH 03755
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Florencio Lopez de Silanes
EDHEC Business School ( email )
393, Promenade des Anglais BP 3116
Nice, 06202
France
+33 (0) 4 93 18 78 07 (Phone)
+33 (0) 4 93 18 78 41 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Tinbergen Institute ( email )
Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands
Andrei Shleifer
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-495-5046 (Phone)
617-496-1708 (Fax)
HOME PAGE: http://www.economics.harvard.edu/~ashleife/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Feedback to SSRN


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