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Ownership structures and effects of related lending and loan guarantees on firm performance in business groups

Asian Journal of Accounting and Governance

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Field Value
 
Title Ownership structures and effects of related lending and loan guarantees on firm performance in business groups
 
Creator Maheshwari, Yogesh
Gupta, Pankaj
 
Subject Ownership, related lending, loan guarantees, related party transactions, firm performance
 
Description This study identifies a sample of listed Indian business group firms, which exhibit an increasing trend in leverage, related lending and loan guarantees. Business groups in India, primarily adopt pyramidal structure in which decision making is done through control rights approach. The paper examines the ownership structures in business groups and studies the effects of related lending and loan guarantees on firm performance in such business groups through a panel data regression with fixed effects. The regression results suggest that lending and loan guarantees to related parties affect the operating performance of group firms positively. The relationship has been found to be significant for most of the categories of business groups studied for the two measures of firm performance, namely gross profit to asset ratio and return on assets. However, their effect on market value is found to be negative, leading to an inference that such deals are taken adversely by the market. 
 
Publisher Penerbit UKM
 
Contributor —
 
Date 2018-05-07
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://ejournal.ukm.my/ajac/article/view/14819
10.17576/AJAG-2018-09-07
 
Source Asian Journal of Accounting and Governance; Vol 9 (2018); 77-86
2180-3838
 
Language eng
 
Relation http://ejournal.ukm.my/ajac/article/view/14819/8767
 
Rights Copyright (c) 2018 Asian Journal of Accounting and Governance