Abstract

From January 2011 through March 2018, the Bank of Japan purchased equity index exchange-traded funds (ETFs) worth about 3.5% of GDP. Identification of the effect of central bank ETF purchases on stock valuations and corporate responses is via differently-weighted and changing stock indices. BOJ purchases lift valuations, increase share issuances, and increase total assets. On average, the latter increase is due to cash and short-term securities rather than capital investment. However, firms with worse corporate governance do increase capital investment. These findings suggest central bank equity purchases are a problematic tool for stimulating economic growth through high broad-based private-sector corporate investment.

Abstract

Dynastic-controlled firms are led by founding-family CEOs while the family owns an insignificant share of equity (defined as less than 5%). They represent 7.4% of listed firms in post-war Japan, include well-known firms such as Casio, Suzuki, and Toyota, and are often grouped with widely held firms in the literature. These firms differ in key performance measures from both traditional family firms and non-family firms, and evolve from the former as equity-financed growth dilutes family ownership over time. In turn, the transition from dynastic control to non-family status is driven by a diminution of family legacy and talent.

Abstract

This paper investigates how banks and finance companies operate in business groups. Using uniquely detailed ownership data from Thailand, we find that the controlling shareholders extensively use pyramids to control banks and finance companies and assign different lending strategies across pyramidal tiers. Lower-tier banks tend to extend loans more aggressively and perform more poorly, while upper tier banks carry out more profitable investments. After the crisis hit, upper-tier banks survived and almost all lower-tier banks went bankrupt. Our results suggest that the multilayer organizational structure of bank ownership can affect a bank’s lending behavior and its resistance to economic shocks. 

Abstract

Dynastic-controlled firms are led by founding-family CEOs while the family owns an insignificant share of equity (defined as less than 5%). They represent 7.4% of listed firms in post-war Japan, include well-known firms such as Casio, Suzuki, and Toyota, and are often grouped with widely held firms in the literature. These firms differ in key performance measures from both traditional family firms and non-family firms, and evolve from the former as equity-financed growth dilutes family ownership over time. In turn, the transition from dynastic control to non-family status is driven by a diminution of family legacy and talent.

Abstract

This paper presents the first empirical evidence showing that the marriage of a member of the controlling family adds value to public corporations. The results, based on a uniquely comprehensive data set from Thailand, show that the family firm’s stock price increases when the partner is from either a prominent business or a political family. Abnormal returns tend to be higher for firms whose operation depends on extensive networks. In contrast, marriages to ordinary citizens are not associated with any abnormal returns. These findings are generally supportive of the value of networks in general and marriage in particular.    

Abstract

Family firms depend on a succession of capable heirs to stay afloat. If talent and IQ are inherited, this problem is mitigated. If, however, progeny talent and IQ display mean reversion (or worse), family firms are eventually doomed. Since family firms persist, solutions to this succession problem must exist. We submit that marriage can transfuse outside talent and reinvigorate family firms. This implies that changes to the institution of marriage—notably, a decline in arranged marriages in favor of marriages for “love”—bode ill for the surviival of family firms. Consistent with this, the predominance of family firms correlates strongly across countries with plausible proxies for arranged marriage norms.

Abstract

This paper investigates a little studied but common mechanism that firms use to obtain state favors: business owners themselves seeking election to top office. Using Thailand as a research setting, we find that the more business owners rely on government concessions or the wealthier they are, the more likely they are to run for top office. Once in power, the market valuation of their firms increases dramatically. Surprisingly, the political power does not influence the financing strategies of their firms. Instead, business owners in top offices use their policy-decision powers to implement regulations and public policies favorable to their firms. Such policies hinder not only domestic competitors but also foreign investors. As a result, these politically connected firms are able to capture more market share.

(JEL G15, G38, K23, P48)

Chutatong  Charumilind, Raja Kali and Yupana Wiwattanakantang, 2006, Journal of Business 79, 181-218.

Abstract

This paper investigates a little studied but common mechanism that firms use to obtain state favors: business owners themselves seeking election to top office. Using Thailand as a research setting, we find that the more business owners rely on government concessions or the wealthier they are, the more likely they are to run for top office. Once in power, the market valuation of their firms increases dramatically. Surprisingly, the political power does not influence the financing strategies of their firms. Instead, business owners in top offices use their policy-decision powers to implement regulations and public policies favorable to their firms. Such policies hinder not only domestic competitors but also foreign investors. As a result, these politically connected firms are able to capture more market share.

(JEL G15, G38, K23, P48)

Abstract

This study investigates the effects of controlling shareholders on corporate performance. The empirical results, based on a unique database of Thai firms, do not support the hypothesis that controlling shareholders expropriate corporate assets. In fact, the presence of controlling shareholders is associated with higher performance, when measured by accounting measures such as the ROA and the sales–asset ratio. Since most of the firms do not implement control mechanisms to separate voting and cash flow rights, the controlling shareholders might be self-constrained not to extract private benefits. Otherwise, they would internalize higher costs of expropriation from holding high stakes. The controlling shareholders’ involvement in the management, however, has a negative effect on the performance. The negative effect is more pronounced when the controlling shareholder-and-manager’s ownership is at the 25–50%. The evidence also reveals that family-controlled firms display significantly higher performance. Foreign controlled firms as well as firms with more than one controlling shareholder also have higher ROA, relative to firms with no controlling shareholder. q 2001 Elsevier Science B.V. All rights reserved.

JEL classification: G30; G32

Abstract

This study presents empirical evidence on the determinants of the capital structure of non-financial firms in 1996. Empirical results imply that the tax effect, the signaling effect, and the agency costs play a role in financing decisions. Ownership structure also effects financial policy. Single-family owned firms have significantly higher debt level. Only in single-family owned firms does managerial shareholdings have consistently positive influence on firm leverage. Finally large shareholders affect the debt ratio negatively, implyingthat they may monitor the management. q 1999 Elsevier Science B.V. All rights reserved.

JEL classification: G32

Authors: Mehrotra, Vikas, Lukas Roth, and Yusuke Tsujimoto, and Yupana Wiwattanakantang

Under R&R

Previous versions: 

• Empower Women by Index Membership: Evidence from a Unique Experiment from Japan

• Index Inclusion and Corporate Social Performance: Evidence from the MSCI Empowering Women Index

Presentations:

• The Exeter Sustainable Finance (ESF) Conference, September 19-20, 2024, University of Exeter (UK)

• The 3rd Conference in Sustainable Finance at the University of Luxembourg, July 4, 2024, (Luxembourg)

• The 2024 EFMA Conference, June 26-29, 2024 (Lisbon, Portugal)

• The 2024 Swiss Society for Financial Market Research (SGF Conference), April 5, 2024, (Zurich, Switzerland)

• The Women in Finance Workshop, March 12, 2024, (Warwick, UK)

• The UN-PRI Academic Network Conference, October 3-5, 2023, (Tokyo, Japan)

• The First Waseda Summer Workshop in Finance, July 22, 2023, (Tokyo, Japan)

• The Academy of International Business (AIB) 2023 Conference, July 5-9, 2023. (Warsaw, Poland)

• The Global Corporate Governance Colloquium (GCGC) Meeting, June 16 - 17, 2023, Seoul National University, (Seoul, Korea)

• The 2023 Financial Intermediation Research Society (FIRS) Conference, June 2-4, 2023 (Vancouver, Canada)

• The 3rd Canadian Sustainable Finance Network Conference, August 29-30, 2022 (Victoria, Canada)

Authors: Mario Amore, Morten Bennedsen, Vikas Mehrotra, and Jung Wook Shim and and Yupana Wiwattanakantang

Under R&R 

Presentations:

• The 2026 CGIR–Kyoto University Paper Development Workshop on Stakeholder Theory and Responsible Business, July 6, 2026, at Kyoto University (Kyoto, Japan)

• The 2nd Conference on “Ownership, Control, and Economic Performance,” organized by the Family Business and Long-Term Investment Chair at Université Paris-Dauphine (PSL), June 8–9, 2026, (Paris, France)

• The Global Corporate Governance Colloquium (GCGC) Meeting, June 14 - 15, 2024, Columbia University, (New York, USA)

•  Panel speakers: The Conference on Owners as Strategists: Owner Responsibility in Today’s Economy, June 27, 2023, organized by Bocconi University and University of St. Gallen, (online)

• The BFFI-ECGI conference "Resilience of Family Businesses During Turbulent Times," organized by the Baltic Family Firm Institute (BFFI) and The European Corporate Governance Institute (ECGI), June 30 – July 1, 2023, at Tartu University, Estonia.

Authors:  Alex Michaelides, Andreas Milidonis, Vitaliy Ryabinin and Yupana Wiwattanakantang

Under Review

Presentations:

• The 2025 FMA European Conference, June, 11 – 13, 2025, (Limassol, Cyprus)

• The 2025 Global Entrepreneurship and Innovation Research Conference (GEIRC), June 26-27, 2025, National Taiwan University (NTU) (Taipei, Taiwan)

• The 2025 Swiss Society for Financial Market Research (SGF Conference), April 4, 2025, (Zurich, Switzerland).

• Masaharu Hanazaki, Toshiyuki Souma, and Yupana Wiwattanakantang, 2024, Silent Large Shareholders and Entrenched Bank Management: Evidence from the Banking Crisis in Japan.

• Vikas Mehrotra, Randall Morck, and Jung Wook Shim, and Yupana Wiwattanakantang, 2020, Adoptive Expectations are Impregnable

• Yupana Wiwattanakantang, 1996, The Equity Ownership Structure of Thai firms.

Corporate governance of banks in Thailand 

Corporate Governance of Banks in East Asia 

Thai Business Groups: Crisis and Restructuring 

Banking in Japan: Will “Too Big To Fail” Prevail? 

Did Families Lose or Gain Control after the East Asian Financial Crisis? Evidence from Thailand