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The Structure of Corporate Holdings and Corporate Governance: Evidence from India

Research output: Working paper

Published
Publication date2015
PublisherLancaster University, Department of Economics
Original languageEnglish

Publication series

NameEconomics Working Paper Series
No.13
Volume2015

Abstract

This paper examines how the structure of corporate holdings impacts upon the corporate governance mechanisms and outcomes. Using a panel data of 500 large listed Indian …firms we compare …firms with dispersed equity ownership, and business group …firms with cross-holdings and concentrated family ownership, within the same institutional frameworks. Contrary to the popular hypothesis that concentrated shareholding leads to worse corporate governance outcomes, we find that the corporate governance outcomes are similar for both types of …firms, even though the incentive alignment mechanisms may be different. The results of this paper suggest that corporate holding structures and governance mechanisms adjusts to optimize value and performance.