Dividends and Expropriation

Forthcoming, American Economic Review DIVIDENDS AND EXPROPRIATION Mara Faccio, Larry H. P. Lang, and Leslie young* July 31, 2000 abstract Whereas most US corporations argon widely-held, the predominant form of self-will in eastmost Asia is control by a family, which a lot supplies a pass away manager. These features of crony capitalism be actually more pronounce in Western atomic number 63. In both regions, the salient fashion problem is expropriation of outside shareholders by controlling shareholders. Dividends provide demo on this. Group-affiliated corporations in Europe pay higher(prenominal) dividends than in Asia, dampening Footnotes * Faccio: ancillary Professor, Facoltà di Economia, Dipartimento di Scienze dellEconomia della Gestione Aziendale, Università Cattolica del Sacro Cuore, Largo Gemelli 1, 20123 Milano, Italy. Tel: 39 02 72342436 (e-mail: mara.faccio@mi.unicatt.it); Lang: Professor of pay, Finance Department, The Chinese University of Hong Kong, Hong Kong. Tel: 852 2609 7761 (e-mail: llang@baf.msmail.cuhk.edu.hk.); Young: Professor of Finance and Executive Director, The Asia Pacific Institute of Business, The Chinese University of Hong Kong, Hong Kong. Tel: 852 2609 7421 (e-mail: leslie@baf.msmail.cuhk.edu.hk).

We acknowledge face-saving comments from Maurizio Murgia, Andrei Shleifer, a referee, and seminar participants at the 2000 European financial Management connection meeting in Athens. We thank Stijn Claessens, Simeon Djankov, and Joseph Fan for providing their data for eastmost Asia. Larry Lang acknowledges research support from a Hong Kong UGC Earmarked Grant. 2 insider expropriation. Dividend r ates are higher in Europe, but lower in Asia! , when there are two-fold large shareholders, suggesting that they dampen expropriation in Europe, but exacerbate it in Asia. (JEL G34, G35) Failures in East Asiatic corporate system have lately attracted wide attention through existence blamed for the East Asian financial crisis. Based exclusively on...If you want to get a full essay, order it on our website: OrderEssay.net

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