Business Groups and Risk Sharing Among Firms

2014 ◽  
Author(s):  
Alexandre Messa
Keyword(s):  
Risk Sharing ◽  
Business Groups

scholarly journals Business Groups and Risk Sharing around the World

2005 ◽  
Vol 78 (1) ◽  
pp. 301-340 ◽  
Author(s):  
Tarun Khanna ◽  
Yishay Yafeh
Keyword(s):  
Risk Sharing ◽  
Business Groups ◽  
The World

Employment and Market Innovation in Chinese Business Group Affiliated Firms: The Role of Group Control Systems

2008 ◽  
Vol 4 (2) ◽  
pp. 225-256 ◽  
Author(s):  
Robert E. White ◽  
Robert E. Hoskisson ◽  
Daphne W. Yiu ◽  
Garry D. Bruton
Keyword(s):  
Control Systems ◽  
Risk Sharing ◽  
Business Groups ◽  
Cultural Control ◽  
Institutional Pressures ◽  
Open Market ◽  
Government Ownership ◽  
Group Control ◽  
High Employment ◽  
The Government

Prior research has suggested a number of potential benefits to firm membership in business groups. These benefits include availability of capital and other resources not readily accessible in an open market, the facilitation of entrepreneurship, plus information and risk sharing advantages. We suggest that another important benefit is the assistance of group control systems in helping the firm to manage conflicting pressures in the institutional environment and facilitate coevolution of these conflicting pressures. To empirically demonstrate the relevance of this viewpoint, we examine the case of China where business groups facilitate institutional transition, actively balancing market pressures to increase levels of innovativeness in firms with institutional pressures emanating from the government to maintain high employment levels. Using data from a broad sample of more than 1,000 Chinese affiliate firms in more than 200 business groups, we find that government policy, ownership and managerial mindset influence the political goal of maintaining high employment levels, while interdependence among group affiliate firms is related to lower employment levels. However, while government ownership and the government managerial mindset were negatively related to market innovation activities, group financial and cultural control systems positively affected the tendency of affiliate firms to focus on market innovation.

Does corporate groups accrue higher leverage: Emerging Market Evidence

2020 ◽  
Vol 2 (1) ◽  
pp. 1-1
Author(s):  
Safi Ullah Khan ◽  
Mohammad Faisal Rizwan
Keyword(s):  
Capital Structure ◽  
Risk Sharing ◽  
Financial Constraints ◽  
Emerging Market ◽  
Business Groups ◽  
Income Smoothing ◽  
Corporate Groups ◽  
Insurance Effect ◽  
Group Member ◽  
Reallocation Of Resources

This article explores the capital structure composition of group-affiliated firms. We find that group member firms choose to accrue higher debt ratios compared to non-group counterparts. Further disentangling the higher debt ratios of group-affiliates, we find risk-sharing or co-insurance effect whereby business groups enable member firms to share risks through income-smoothing and intra-group reallocation of resources. Our results suggest that business groups act as internal capital markets, assist affiliated firms overcome financial constraints, and ease access to external capital. Lastly, our study shows that group affiliations positively contribute to firms’ better financial performance relative to the non-group firms.

scholarly journals The Revival of Business Groups’ Risk Sharing: Evidence from Japanese Real Estate Investment Trust Market

2022 ◽  
Author(s):  
Masaki Mori ◽  
Seow Eng Ong ◽  
Joseph T. L. Ooi
Keyword(s):  
Real Estate ◽  
Risk Sharing ◽  
Negative Impact ◽  
Business Groups ◽  
Real Estate Investment Trust ◽  
Real Estate Investment ◽  
Investment Trust ◽  
Significant Difference ◽  
The Difference ◽  
External Management

AbstractWe examine the business groups’ risk-sharing hypothesis in the Japanese Real Estate Investment Trust (REIT) market in which the unique external management system seems to be reinforcing power relationships among firms affiliated with the modern Japanese business groups, called keiretsu. We find that REITs whose sponsors belong to one of the keiretsu groups (keiretsu REITs) have significantly lower volatility of profitability than REITs whose sponsors do not belong to the keiretsu groups (non-keiretsu REITs). There is no significant difference in profitability between keiretsu REITs and non-keiretsu REITs, controlling for firm and property characteristics. The abnormal portion of the profitability unexplained by firm characteristics is also significantly lower with keiretsu REITs. We also find that the keiretsu affiliation reduces the systematic volatility of affiliated REITs, while such an effect is not observed with the idiosyncratic volatility, suggesting that the risk-sharing effect may be beneficial for the value of REITs. Using the difference-in-differences design with propensity score matching, we find that the negative impact of the Great East Japan Earthquake on the profitability was significantly smaller with keiretsu REITs than with non-keiretsu REITs. Keiretsu REITs were also able to stabilize their capital structure by shifting some short-term debts to long-term debts without increasing the cost of loans under the uncertain situation caused by the Earthquake. Keiretsu REITs were able to borrow money from their affiliated group banks even right after the earthquake, while non-keiretsu REITs seem to have struggled to secure loans from those banks.

Promoting Women’s Entrepreneurship in Lebanon: Enhancing Empowerment or Vulnerability?

1970 ◽  
pp. 39-47
Author(s):  
Nabil Abdo
Keyword(s):  
Low Income ◽  
Women Entrepreneurs ◽  
Group Formation ◽  
Business Groups ◽  
Economic Empowerment ◽  
Sustainable Livelihood ◽  
Business Skills ◽  
Palestinian Women ◽  
Support Organizations ◽  
And Training

The International Labour Organization in Beirut has been running a project in the Palestinian Camps of Nahr El Bared and Ein El Helweh entitled “Palestinian Women Economic Empowerment Initiative”. The project started in 2011 and targets lowincome Palestinian women entrepreneurs through a threefold strategy: giving out loans and grants to women business groups in order to expand their businesses; training women entrepreneurs to enhance their business skills; and building the capacity of support organizations in order to improve business development services for women entrepreneurs and training them to be formally certified to deliver business group formation training. The project builds on the potential of business groups in assuring the protection of Palestinian women entrepreneurs from risks through resilience, pooling of resources, and collective voice. The objectives are to assure a sustainable livelihood for Palestinian women entrepreneurs through supporting them in expanding their businesses beyond survivalist low-income activities

External Factors of Big Business Transformation in Russia

2005 ◽  
pp. 72-89 ◽  
Author(s):  
Ya. Pappe ◽  
Ya. Galukhina
Keyword(s):  
Financial Market ◽  
Capital Market ◽  
Business Groups ◽  
External Factors ◽  
Big Business ◽  
Business Transformation ◽  
Global Standards ◽  
The World ◽  
Principal Subject

The paper is devoted to the role of the global financial market in the development of Russian big business. It proves that terms and standards posed by this market as well as opportunities it offers determine major changes in Russian big business in the last three years. The article examines why Russian companies go abroad to attract capital and provides data, which indicate the scope of this phenomenon. It stresses the effects of Russian big business’s interaction with the world capital market, including the modification of the principal subject of Russian big business from integrated business groups to companies and the changes in companies’ behavior: they gradually move away from the so-called Russian specifics and adopt global standards.

Business-groups in Russian industries

2004 ◽  
pp. 121-134 ◽  
Author(s):  
S. Avdasheva
Keyword(s):  
Industrial Organization ◽  
Economic System ◽  
Institutional Economics ◽  
Business Groups ◽  
Control Rights ◽  
Organization And Management ◽  
Russian Economy ◽  
Main Determinants ◽  
Soviet Economic System

The chapter of “Institutional Economics” textbook is devoted to the development of business-groups as a specific feature of industrial organization in the Russian economy. The main determinants of forming and functioning of business-groups such as allocation of property rights in Soviet enterprises, networks of directors and executive authorities in the Soviet economic system as well as import of new institutes and inefficient state enforcement are in the center of analysis. Origins, structure, organization and management within the groups and the role of shareholding and informal control rights are considered.

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