Internal Capital Markets in Family Business Groups During the Global Financial Crisis

55 Pages Posted: 2 Nov 2014 Last revised: 18 Dec 2018

See all articles by Alvin E. S. Ang

Alvin E. S. Ang

The Hang Seng University of Hong Kong, School of Business, Department of Economics and Finance

Ronald W. Masulis

University of New South Wales, Sydney; European Corporate Governance Institute (ECGI); Financial Research Network (FIRN); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

Peter K. Pham

Australian School of Business - University of New South Wales; Financial Research Network (FIRN)

Jason Zein

UNSW Business School; Financial Research Network (FIRN)

Date Written: December 5, 2018

Abstract

Using a carefully-constructed global dataset of family business groups, we show that group affiliation moderates corporate investment declines experienced in the 2008 Global Financial Crisis. During this period, group internal capital market activity intensifies. The investment activity of group firms with high-growth profiles become more reliant on intra-group capital transfers. Group firms do not realize more negative crisis-period stock returns than other firms, while post-crisis, they outperform standalone firms. Our study sheds new light on the heterogeneity of firm-level responses to the largest capital market disruption in recent history.

Keywords: Family business groups, Internal capital markets, Corporate investments, Financial crisis

JEL Classification: G01, G31, G32

Suggested Citation

Ang, Alvin E. S. and Masulis, Ronald W. and Pham, Peter Kien and Zein, Jason, Internal Capital Markets in Family Business Groups During the Global Financial Crisis (December 5, 2018). UNSW Business School Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=2517810 or http://dx.doi.org/10.2139/ssrn.2517810

Alvin E. S. Ang (Contact Author)

The Hang Seng University of Hong Kong, School of Business, Department of Economics and Finance ( email )

Hang Shin Link, Siu Lek Yuen
Shatin, N.T.
Hong Kong

Ronald W. Masulis

University of New South Wales, Sydney ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia
612-9385-5860 (Phone)
612-9385-6347 (Fax)

European Corporate Governance Institute (ECGI) ( email )

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Belgium

Financial Research Network (FIRN)

C/- University of Queensland Business School
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Queensland
Australia

HOME PAGE: http://www.firn.org.au

National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )

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1 Business Link
Singapore, 117592
Singapore

Peter Kien Pham

Australian School of Business - University of New South Wales ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Jason Zein

UNSW Business School ( email )

Sydney, NSW 2052
Australia
+61 2 93855858 (Phone)
+61 2 93855858 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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