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Extraction of private benefits of control by families: tunnelling and trading in a private information environment
conference contribution
posted on 2023-06-10, 02:46 authored by Xiaoxiang ZhangXiaoxiang Zhang, Igor Filatotchev, Jenifer PiesseUsing a sample of Hong Kong listed companies we investigate how private benefits of control are extracted by a family via tunnelling and trading in shares. We find that family ownership is associated with entrenchment/liquidity-using effects, leading to tunnelling and trading by families. Family board overrepresentation is associated with entrenchment/liquidity-restricting effects, facilitating tunnelling but limiting market scrutiny via informed trading. Family board leadership leads to monitoring/liquidity-promoting effects that prevent tunnelling and promote the price discovery process. These effects differ between founder and heir-families. Tunnelling and trading are two independent mechanisms of rent extraction even after controlling for endogeneity.
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Cass Business School EMG conferenceEvent name
Cass Business School EMG conferenceEvent location
LondonEvent type
conferenceEvent date
2011Department affiliated with
- Accounting and Finance Publications
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2022-03-01First Open Access (FOA) Date
2023-05-25First Compliant Deposit (FCD) Date
2023-05-25Usage metrics
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