Business groups and the determinants of corporate ownership

Why are these Islands of Conscious Power Found in the Ocean of Ownership? Institutional and Governance Hypotheses Explaining the Existence of Business Groups in Sweden

“…This de®nition is quite similar to de®nitions provided in earlier studies in the area (e.g. Aoki, 1990;Baldissera, 1993;Barca, 1995;Brioschi et al, 1989;Buzzacchi and Colombo, 1996;Cable and Yasuki, 1985;Chang and Choi, 1988;Daems, 1978;Encaoua and Jacquemin, 1982;Feenstra et al, 1997;Gerlach, 1992;van Hulle, 1996;Khanna and Palepu, 1996;Le, 1978;Lincoln et al, 1992;Strachan, 1976;Weinstein and Yafeh, 1995). The ®rms involved are legally independent, typically having several shareholders, which distinguishes BGs from the wholly integrated corporations characterized by ®at and hierarchy (Williamson, 1975).…”

“…In Japan and Germany the main supplier of capital is the Haus-Bank. In Italy several groups have developed an internal funding allocation mechanism (Buzzacchi and Colombo, 1996).…”

“…The existence of BGs has almost exclusively been explained by there being a solution to problems associated with market ineciency, such as capital shortage (Brioschi et al, 1989;Buzzacchi and Colombo, 1996;Le, 1978), absence of risk reduction possibilities (Brioschi et al, 1989;Le, 1978) and information asymmetry (Amsden and Hikino, 1991) all due to undeveloped capital markets. A more general explanation that has been oered focuses on the market's lack of reliability and the lack of trust in it, its being argued that BGs have the function of producing institutional stability and goodwill (Daems, 1978;Khanna and Palepu, 1996;Le, 1978;Ponomarev, 1995).…”

“…In the limited literature on BGs (cf. Feenstra et al, 1997), it has been suggested that the rationale behind BGs is that they oer an organizational solution to problems created by market ineciencies, mainly capital shortage and low capacity to diversify risk due to less developed credit markets (Amsden and Hikino, 1991;Brioschi et al, 1989;Buzzacchi and Colombo, 1996;Hilferding, 1910;Le, 1978). An additional explanation provided for the existence of BGs has been that they oer institutional stability and goodwill (Daems, 1978;Khanna and Palepu, 1996;Le, 1978;Ponomarev, 1995).…”

Evolution of the Debate on Control Enhancing Mechanisms: A Systematic Review and Bibliometric Analysis

“…These phenomena reflect the wide spread of disproportionate ownership mechanisms in Europe as solutions to company growth in the absence of well‐developed financial markets and restrictive regulations (Saggese ). In these circumstances, literature highlights that the separation between ownership and control produces majority–minority shareholder conflicts that are explained through second‐type agency theory (Buzzacchi and Colombo ; Leech ). Interestingly, from 1986 to 1998, both our literature systematization and our keyword map show increasing attention to the entrenchment of controlling blockholders.…”