The Types of Controlling Shareholder’s Private Benefits and the Entry Mode Decisions of Emerging Market Multinational Enterprises

• Main Authors: Sung, Wei, 宋瑋
• Other Authors: Kao, Ming-Sung
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/qfbcwc

碩士 === 輔仁大學 === 金融與國際企業學系金融碩士班 === 105 === The choice of entry mode most reference from the size of the company or its competitive advantage in the past, but in a series of research in emerging markets company’s entry mode, we found that emerging markets companies generally exist controlling shareholder, which is different from previous research in developed markets companies ─ the equity in emerging market companies will not separate over time. This study is based on the private benefits of emerging markets companies, exploring how the control shareholder’s private benefits impact the entry mode decisions. We examine whether private benefits will affect the choice of entry mode. We discuss it from three aspects: ownership structure, transaction and management. Empirical result shows that the bigger the divergence in control and cash flow rights, the more possible corporate will choose sole proprietorship to be their entry mode. This means control shareholders may try to influence corporate to invest in sole proprietorship because they want to protect their private benefits, and avoid the monitoring mechanism reducing the scope of private benefits; the bigger the related party transaction, the more possible corporate will choose joint venture to be their entry mode. This means control shareholders may try to influence corporate to invest in joint venture because they can transfer company’s assets. However, there are no significant relations between earnings management and entry mode. We believe that besides consideration for private benefits, there are other purposes of discretionary accruals. As a result, when the companies of emerging market face oversea investment decisions, private benefit is also one of the factor that will affect the entry mode choices.