Pyramiding of Family-owned Banks in Emerging MarketsPramuan Bunkanwanicha, Jyoti Gupta, Yupana Wiwattanakantang () and ユパナ ウィワッタナカンタン No 2006-4, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University Abstract: This paper analyzes family-owned banks in Thailand. Using the data before the financial crisis, we find that wealthy families extensively use pyramids to control a business empire which includes financial and non-financial firms. We analyze the entire family group structure and find that one-third of the banks were placed at the second tier near the apex and two-third of the banks were located at deeper tiers in the pyramids. The empirical results show that bottom tier banks have lower performance due to risky loans. This evidence is consistent with the view that when the controlling family maximizes growth and stability of the entire group, lower tier firms are assigned to undertake risky investment. This ownership setting can insulate the entire group from the adverse effect when the investment does not pay off because the family owns relatively low cash flow stake in lower tier firms. Keywords: Family-owned banks; Pyramids; Business groups; Emerging markets (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hit:hitcei:2006-4 Access Statistics for this paper More papers in CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.