Abstract
Although agency theory implies that greater parent ownership can help mitigate agency conflict, principal–principal conflicts could arise among controlling and other minority shareholders. This study investigates corporate governance in publicly listed subsidiary firms after the establishment of small-cap markets, which is a unique setting in Japan. The results show that parent control has a negative relationship to dividend payout and firm profitability. However, parent control enhances sales growth, which is not consistent with parent control exploitation. Foreign shareholders moderate the conflict between parent firms and other shareholders related to dividends and firm profitability.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
