Abstract
This paper investigates the spillover effects of the new delisting regulations on normally-listed affiliates from the perspective of controlling shareholders' tunneling behavior. We find that after the implementation of new delisting regulations, there is a significant rise in related-party transactions among normally-listed firms when other affiliated firms within the same business group face delisting threats. Our findings indicate that the new regulations exacerbate the concerns about delisting, compelling controlling shareholders to engage in tunneling behaviors within normally-listed affiliates and to redirect resources to the delisting-threatened firms. This study indicates how stringent regulations affect shareholders' behaviors and intensify agency conflicts.
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.
