How much control causes tunneling? Evidence from China

Chen, Wenting; Li, Shanmin; Chen, Crystal Xiaobei

doi:10.1016/j.cjar.2016.10.001

Cited by 13 publications

(14 citation statements)

References 38 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…7 of 2018). The results of this study support previous research conducted by Jiang and Lee (2009), Jiang et al (2010), Chen et al (2017) and Chizema et al (2020). The first hypothesis using TUL3 (payables-receivables) shows the same results as TUL2.…”

Section: Hypothesis Testing Resultssupporting

confidence: 91%

Ownership concentration, foreign ownership and tunneling in Indonesia

Wulandari

Setiawan

2021

RAMJ

View full text Add to dashboard Cite

Purpose This study aims to examine the effect of ownership concentration and foreign ownership on tunneling activities in Indonesia. Design/methodology/approach The population in this study were manufacturing companies listed on the Indonesian Stock Exchange from 2014 to 2018. The total observations used in this study were 557 observations. This study used three measurements to assess tunneling activities in a company, namely, related party receivables (TUL1), related party payables (TUL2) and related party receivables-payables (TUL3). Findings The results of this study indicated that ownership concentration and foreign ownership had a negative effect on tunneling activity of TUL1. Meanwhile, the effect of ownership concentration and foreign ownership on TUL2 and TUL3 showed a positive effect. This indicated that manufacturing companies in Indonesia preferred to carry out tunneling activities through related party payables compared with related party receivables. Foreign ownership was also effective in controlling the company’s tunneling activities when the company conducted tunneling transactions of related party receivables. Small companies and companies with positive return on assets were more susceptible to tunneling activities carried out by the companies. Practical implications The results of this study can be used as a consideration for investors in making decisions by looking at tunneling activities carried out by companies in Indonesia. Originality/value To the best of the authors’ knowledge, no previous study in the tunneling literature has compared the results of the effect of the concentration of foreign ownership and ownership on tunneling using three measurements at once. This is useful to see the company’s behavior of tunneling activities from a different perspective.

show abstract

Section: Hypothesis Testing Resultssupporting

confidence: 91%

Ownership concentration, foreign ownership and tunneling in Indonesia

Wulandari

Setiawan

2021

RAMJ

View full text Add to dashboard Cite

show abstract

“…One aspect that influences transfer pricing decisions is tunneling incentives or transferring assets and profits out of the company for the benefit of the company's controlling shareholder (Chen et al, 2017). One example of tunneling activities is not distributing dividends, selling assets or securities from companies they control to other companies they own at below-market prices and selecting family members who do not meet the qualifications to occupy important positions in the company.…”

Section: Introductionmentioning

confidence: 99%

Factor Supporting Companies Performing Transfer Pricing

Nurjannah¹

2022

Jurnal Akuntansi

View full text Add to dashboard Cite

This study examines the effect of taxes, tunneling incentives, and bonus mechanisms on transfer pricing. The population in this study is the financial statements of primary and chemical industry companies listed on the Indonesia Stock Exchange in the 2018-2020 period, totaling 64 companies obtained through the official website of the Indonesia Stock Exchange (www.IDX.co.id.) This study's sample was obtained using the purposive sampling method; the total sample is 39 data from 13 financial statements of the primary and chemical industry sector for three years. Secondary data was collected through the Indonesia Stock Exchange website and analyzed using Multiple Regression Analysis with the Ordinary Least Square model using the Eviews Version 12 software. The results found that the tax variable shows a positive and significant effect on the occurrence of transactions transfer pricing. Meanwhile, the variable tunneling incentive and the bonus mechanism have no significant effect on transfer pricing.

show abstract

“…However, using data on private listed companies in China, Zhao and Yu (2018) found that a high shareholding ratio of the largest shareholder was associated with low corporate investment efficiency and a higher level of tunneling activity by the shareholder. According to Chen et al (2017), controlling shareholders’ shareholding ratios affect tunneling behavior significantly in China, while the relationship between controlling shareholders’ shareholding ratios and tunneling follows an incline-decline-incline shape. Song (2015) considered differences in the managerial positions of large shareholders in China’s private listed companies.…”

Section: Literature Reviewmentioning

confidence: 99%

Multi-Factor Collaborative Governance of Controlling Shareholder Expropriation Behavior in Emerging Economies: A Perspective of Double Principal-Agent Conflicts

Ping

2022

Sage Open

View full text Add to dashboard Cite

Controlling shareholder expropriation is an important issue in corporate governance in emerging economies. The existing literature discusses the effects of minority shareholder legal protection, controlling shareholder ownership, and managerial shareholding on controlling shareholder expropriation, which is mainly empirical research with insufficient attention to the internal relationships among the governance factors. This research builds theoretical models to study the interactive mechanisms between minority shareholder legal protection, controlling shareholders’ initial shareholding ratios, managerial shareholding, controlling shareholder expropriation, and management effort. Furthermore, setting reasonable ranges for parameters, we use MATLAB to conduct numerical simulations and expand the detailed analyses to quantitatively reveal the degrees of influence of the governance factors. Our results show that controlling shareholder expropriation is negatively related to the degree of minority shareholder legal protection and controlling shareholders’ initial shareholding ratios, while the optimal managerial shareholding ratio is positively related to the degree of minority shareholder legal protection and controlling shareholders’ initial shareholding ratios. The findings enrich the literature on the governance of controlling shareholder expropriation and provide new approaches to and theoretical explanations for the governance of controlling shareholder expropriation toward sustainability in emerging economies.

show abstract

How much control causes tunneling? Evidence from China

Cited by 13 publications

References 38 publications

Ownership concentration, foreign ownership and tunneling in Indonesia

Ownership concentration, foreign ownership and tunneling in Indonesia

Factor Supporting Companies Performing Transfer Pricing

Multi-Factor Collaborative Governance of Controlling Shareholder Expropriation Behavior in Emerging Economies: A Perspective of Double Principal-Agent Conflicts

Contact Info

Product

Resources

About