Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • June 2012
  • Article
  • Review of Financial Studies

A Reexamination of Tunneling and Business Groups: New Data and New Methods

By: Jordan I. Siegel and Prithwiraj Choudhury
  • Format:Print
ShareBar

Abstract

One of the most rigorous methodologies in the corporate governance literature uses firms' reactions to industry shocks to characterize the quality of governance. This methodology can produce the wrong answer unless one considers the ways firms compete. Because macro-level shocks reverberate differently at the firm level depending on whether a firm has a cost structure that requires significant adjustment, the quality of governance can only be elucidated accurately analyzing a firm's business strategy and their corporate governance. These differences can help one determine whether the fruits of a positive macro-level shock have been expropriated by insiders. Using the example of Indian firms, we show that an influential finding is reversed when these differences are considered. We further argue that the conventional wisdom about tunneling and business groups will need to be reformulated in light of the data, methodology, and findings presented here.

Keywords

Governance; System Shocks; India

Citation

Siegel, Jordan I., and Prithwiraj Choudhury. "A Reexamination of Tunneling and Business Groups: New Data and New Methods." Review of Financial Studies 25, no. 6 (June 2012).
  • Find it at Harvard
  • Read Now

About The Author

Prithwiraj Choudhury

Technology and Operations Management
→More Publications

More from the Authors

    • 2022
    • Faculty Research

    Is Hybrid Work the Best of Both Worlds? Evidence from a Field Experiment

    By: Prithwiraj Choudhury, Tarun Khanna, Christos A. Makridis and Kyle Schirmann
    • March 2022
    • Faculty Research

    Unilever: Remote Work in Manufacturing

    By: Prithwiraj Choudhury and Susie L. Ma
    • March 2022
    • Faculty Research

    The Future of Start-Up Chile

    By: Prithwiraj Choudhury, Ruth Costas and Pedro Levindo
More from the Authors
  • Is Hybrid Work the Best of Both Worlds? Evidence from a Field Experiment By: Prithwiraj Choudhury, Tarun Khanna, Christos A. Makridis and Kyle Schirmann
  • Unilever: Remote Work in Manufacturing By: Prithwiraj Choudhury and Susie L. Ma
  • The Future of Start-Up Chile By: Prithwiraj Choudhury, Ruth Costas and Pedro Levindo
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College