Kinship, Control, and Incentives

35 Pages Posted: 26 Dec 1998

See all articles by Chu-Chia S. Lin

Chu-Chia S. Lin

National Chengchi University (NCCU) - Department of Economics

Ivan P. L. Png

National University of Singapore (NUS)

Date Written: October 1998

Abstract

Opportunistic behavior can be resolved through contract or by adjusting the structure of ownership. Previous scholarship has focussed on economic factors that influence the trade-off between contract and ownership. We focus on the effect of a cultural factor -- kinship -- and hypothesize that the presence of kinship ties leads to a relative preference for contract over ownership as the way to resolve opportunistic behavior. This hypothesis is tested on a data set of Taiwanese direct investments in Mainland China. The results provide fairly strong support to the hypothesis.

JEL Classification: F2, G2, K1, L2

Suggested Citation

Lin, Chu-Chia S. and Png, Ivan P. L., Kinship, Control, and Incentives (October 1998). Available at SSRN: https://ssrn.com/abstract=142664 or http://dx.doi.org/10.2139/ssrn.142664

Chu-Chia S. Lin

National Chengchi University (NCCU) - Department of Economics ( email )

Taipei 116
Taiwan, ROC

Ivan P. L. Png (Contact Author)

National University of Singapore (NUS) ( email )

Singapore, 117543
Singapore
+65 6516-6807 (Phone)

HOME PAGE: http://sites.google.com/site/iplpng/

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