Is there tunneling in Small Business Groups? Evidence from French SMEs

No 10-003.RS, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: This paper investigates the influence of firm control structure on firm individual economic performance using a unique firm level data set of ownership and balance sheet information. This study fills a gap in the empirical governance literature by investigating whether or not there is expropriation of minority shareholders in small business groups. Contrary to what is usually observed for large business groups’ results show a positive relationship between the separation of control from ownership and firm performance. Results also underline that tunneling, in small business groups, seems motivated by controlling shareholders’ profit stability rather than profit maximization.

Keywords: Ownership; Control; Tunneling; Small Business. (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Pages: 55 p.
Date: 2010
New Economics Papers: this item is included in nep-bec
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