英语论文网

Like the firm’s investment and financing decisions, the choice of governance structure – organisational form, voting rights, board structure, etc – are an important part of corporate finance
Need to understand the choice organisational form - private versus public, ownership structure, pyramidal versus horizontal

Role of Institutional Structures
Legal system
Conflicts of interest between corporate insiders (managers, employees and/or majority shareholders) and external investors shape corporate policy and productivity.
The extent to which contracts can be used to mitigate these problems depends on the legal system, which consists of both the content of the laws (investor protection), the quality of their enforcement (propensity to rely on the legal system to make and implement laws, mediate disputes and enforce contracts) and corruption.

Outcome of Legal System
Insider system
本论文由英语论文网 www.51lunwen.org整理提供

Investor protection is weak, stock markets are small, corruption is high, political system is less democratic, market for corporate control is less active, short-term bank debt dominates as financing source
Outsider system
Investor protection is high, stock markets are larger, corruption is low, political system is more democratic, market for corporate control is more active, external finance (equity and long-term debt) dominates as financing source

Implication
In countries with weaker investor protection, poorer accounting rules, lower tax compliance, less independent press, the private benefits of control are larger (Dyck and Zingales, 2004).
Poor investor protection limits their ability to raise external capital (La Porta et al, 1997).
Insider systems
Implication is private ownership under these circumstances

A Question
Is it that the legal system influences funding sources and through this organisational form or is it that legal system influences organisational form and through this funding sources
Evidence suggests former
Franks et al, 2008 – as Continental Europe acquired characteristics of an outsider system, observe a decrease in family firms and an increase in widely held companies.

Corporate Form
Private versus public firms
Difference between concentrated and widely dispersed shareholding of public firm
Family firm
Can be private or public but in most cases “large” part is private
Pyramidal versus horizontal
本论文由英语论文网 www.51lunwen.org整理提供

Cross-holdings and non-voting share
Non-family
Private/public with concentrated shareholding

Why Private Firms?
Family or controlling shareholder reduces agency problems.
Possibly true for “horizontal” family or non-family firms (Morck and Yeung, 2004 )
For control structures (pyramids, cross-holdings and non-voting shares)
Similar agency problems
Private benefits of control
Entrenchment of management
Tunneling assets out of the firm
But is the performance of family firms superior?
Investment decision
Avoid external scrutiny and myopia

Why Family Firm?
Contracting
Implicit contracts, reputational capital, jointly managed assets
High value to relationships
Overcome corruption
Extract value from and protect political connection
Taxes
Capital 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。