The Benefits and Costs of Group Affiliation: Evidence from East Asia

business group, group affiliation, East Asian corporations

The Benefits and Costs of Internal Markets: Evidence from Asia's Financial Crisis

This study examines the role of internal capital markets and diversification during normal and turbulent times. We hypothesize that internal markets are more valuable for firms in countries with less-developed financial markets and that diversification generally reduces risk. To conduct our tests, we study 3,000 East Asian corporations over the period before and during the 1997-1998 financial crisis. We find support for the internal market hypothesis during normal times. We find, however, that more diversified firms perform worse during a crisis, especially in less-developed countries. This suggests that more diversification and greater usage of internal markets is associated with higher risk-taking, especially when external markets are less developed.

The Costs of Group Affiliation: Evidence from East Asia

We examine the costs of business group affiliation using data for 2,600 firms in nine East Asian economies for the 1994-1996 period. We find that group-affiliated firms are on average valued below independent firms, with the discount attributable to firms whose ultimate owners have voting rights exceeding cash-flow rights. When there is no divergence between voting and cash flow rights, group-affiliated firms actually have a slight value premium over independent firms. Our results are robust to different valuation measures, time periods and estimation techniques. The evidence is consistent with the view that the anticipation of expropriation associated with group affiliation more than offsets any possible benefits of group membership.

The Pattern and Valuation Effects of Corporate Diversification: A Comparison of the United States, Japan, and other East Asian Economies

Corporate diversification, Valuation effects, East Asia, USA, Japan

Expropriation of Minority Shareholders in East Asia

We examine the evidence on expropriation of minority shareholders by the controlling shareholder in publicly traded companies in nine East Asian countries. Higher cash-flow rights are associated with higher market valuation. In contrast, higher control rights have an insignificant or negative effect on corporate valuation. Deviations of voting from cash-flow rights through the use of pyramiding, cross-holdings, and dual-class shares, are associated with lower market values. Results are robust to the time period we study, splitting the sample by individual countries, using alternative measures of the incentive for expropriation, and using alternative measures for firm valuation. We conclude that the risk of expropriation is the major principal-agent problem for public corporations in East Asia.

Cloning of spin-coherent states

We consider optimal cloning of the spin coherent states in Hilbert spaces of different dimensionality d. We give explicit form of optimal cloning transformation for spin coherent states in the three-dimensional space, analytical results for the fidelity of the optimal cloning in d=3 and d=4 as well as numerical results for higher dimensions. In the low-dimensional case we construct the corresponding completely positive maps and exhibit their structure with the help of Jamiolkowski isomorphism. This allows us to formulate some conjectures about the form of optimal coherent cloning CP maps in arbitrary dimension.Comment: LateX, 9 pages, 1 figur

Physics of Solar Prominences: II - Magnetic Structure and Dynamics

Observations and models of solar prominences are reviewed. We focus on non-eruptive prominences, and describe recent progress in four areas of prominence research: (1) magnetic structure deduced from observations and models, (2) the dynamics of prominence plasmas (formation and flows), (3) Magneto-hydrodynamic (MHD) waves in prominences and (4) the formation and large-scale patterns of the filament channels in which prominences are located. Finally, several outstanding issues in prominence research are discussed, along with observations and models required to resolve them.Comment: 75 pages, 31 pictures, review pape