Financial Accounting Standard Committee modified the Statement of Financial Accounting Standards (SFAS) No.7 ¡§Consolidated Financial Statement¡¨ in 2004. The new standard was conducted in 2006. This study is to discuss the influence of the modified Standard on earnings management of Business Groups. The test samples include 178 companies, which belong to 69 business groups. The test window is from 2005 June to 2007 June. We, using Modified Jones Model, compared the discriminate accruals generated from both consolidated financial statements and financial statements of parent companies. The findings of this study are presented as follows: 1. The modification of SFAS No.7 conducted no influence on earnings management and related party transactions of business groups. 2. After modified SFAS No.7 was conducted, the discriminate accruals generated from consolidated financial statements differ from those of financial statements of parent companies. However, no such difference exists before SFAS No.7 was modified. The findings reveal that the modification of SFAS No.7 helps fully disclose the financial information of business groups. The stakeholders, therefore, should consider both consolidated financial information and financial statements of single parent companies.

This dissertation explored the capacity of business group diversification to generate value to their affiliates in an institutional environment characterized by the adoption of structural pro-market reforms. In particular, the three empirical essays explored the impact of business group diversification on the internationalization process of their affiliates. The first essay examined the direct effect of business group diversification on firm performance and its moderating effect on the multinationality-performance relationship. It further explored whether such moderating effect varies depending upon whether the focal affiliate is a manufacturing or service firm. The findings suggested that the benefits of business group diversification on firm performance have a threshold, that those benefits are significant at earlier stages of internationalization and that these benefits are stronger for service firms. The second essay studied the capacity of business group diversification to ameliorate the negative effects of the added complexity faced by its affiliates when they internationalized. The essay explored this capacity in different dimensions of international complexity. The results indicated that business group diversification effectively ameliorated the effects of the added international complexity. This positive effect is stronger in the institutional voids rather than the societal complexity dimension. In the former dimension, diversified business groups can use both their non-market resources and previous experience to ameliorate the effects of complexity on firm performance. The last essay explored whether the benefits of business group diversification on the scope-performance relationship varies depending on the level of development of the network of subsidiaries and the region of operation of the focal firm. The results suggested that the benefits of business group diversification are location bound within the region but that they are not related to the level of development of the targeted countries. The three essays use longitudinal analyses on a sample of Latin American firms to test the hypotheses. While the first essay used multilevel models and fix effects models, the last two essays used exclusively fix effects models to assess the impact of business group diversification. In conclusion, this dissertation aimed to explain the capacity of business group diversification to generate value under conditions of institutional change.

By using the data on Indian firms on the BSE 500 Index during the period 2005-2006, we find that family ownership affects group affiliated firms more positively than standalone firms. Group affiliated firms underperform initially as compared to standalone firms but after certain threshold of family ownership their performance becomes better than standalone firms. Within diversified Indian Business Group, family ownership affects highly diversified affiliates positively. Effect of family excess vote holdings and involvement of family management is found to be insignificant. We also find that block holders affect firm value negatively. Our results are in contrast with the existing literature of diversification and family ownership on developed market especially, US and UK. Some of our results are consistent with those of Khanna and Palepu (2000). This paper supports most of the findings of Khanna and Palepu based on more complete and reliable data set. In addition, it shows that the superior performance of highly diversified groups is related to greater family ownership. In the second essay, we examined the issues related to market reaction on IT outsourcing announcement and firm characteristics which induce firms to outsource. We find that IT outsourcing has a strong positive effect on stock prices of announcing firms, especially for longer event windows. We also find that the higher the pre-announcement inefficiency of a firm (as evidenced by lower asset turnover ratios, higher operating cost to sales, and higher cost of good sales to sales), the greater the positive price reaction to the outsourcing announcements. We also find that firms with higher information asymmetry problems (firms in the service industry) elicit a higher positive market reaction at the time of outsource announcement. Finally, firms that are likely to outsource are cost inefficient, and/or are cash needy.

¡@¡@By utilizing longitudinal data over 10 years, this research tries to examine the relationships between distinctive political linkages by family members and the diversification implications in family business group in Taiwan. The past researches have highlighted that the political linkages established by family members have significant influence on the family business group¡¦s diversification. However, there is little researches examine who¡¦s political linkage is critical in determining the diversification decision in family business group. From social capital viewpoint, this research tries to investigate the diversification implications of political linkages established by three family roles, i.e., the founder, the sons, and the marriage roles, in family business groups. The results reveal that the founder¡¦s informal political linkages have significantly positive influence on the diversification. Furthermore, the political linkages established by marriage roles do not reveal significant influence on the group¡¦s diversification. However, the son¡¦s political linkages have distinctive influences on the diversification decision. In that, the son¡¦s formal political linkages have significantly negative influence on diversification, but the son¡¦s informal political linkages have significantly positive influence on diversification. The results indicate that the differential roles in family business groups have distinctive influence on the strategy decisions. The results provide insightful theoretical and practical implications in diversification issue and political linkages issues in largely family business groups.

The study aims to analyze the impact of political linkage on diversification strategy and firm performance. Previous studies indicate that firm¡¦s political linkages will generate performance impact in emerging economies. However, whether firm¡¦s political linkages will generate performance implications are underestimated. By utilizing longitudinal data in financial family business groups in Taiwan, this study tries to examine the relationships among political linkages, diversification strategy, and family business group¡¦s performance from the social capital viewpoint. The results indicate that in the current database, the higher level of formal political linkages, the higher degree of diversification in family business groups. Moreover, diversification strategy will generate mediated impact on the relationship between formal political linkages and performance in family business groups. In that, the consideration of diversification will lower the performance implications by formal political linkage in family business groups. The family business group¡¦s formal political linkageswill generate distinctive impact on diversification strategy and performance in emerging economies. The results provide referable value in addressing political linkages issues in family business groups in Asia.

­^¤å´£­n Information industry has made progress rapidly in Mainland China from 80's.This study applies Devlin's (1991) framework and brings up a three dimensional space model which includes "growth type", "growth direction", and "growth mode". We can analyze the change of the information enterprises in Mainland China by way of this model. With respect of case study, We describe and examine Legend Group's development strategy and organization structure by taking advantage of our model. We recognize Legend Group is a type of Related-Constrained enterprise, its growth type includes informal organization structure, functional centralization, and regional decentralization; its growth direction is the development strategy of a backward linkage--Trade, Manufacturing, and R&D; its growth mode is licensing within joint development, and extends multi-type cooperative relationship. At last, we demonstrate the growth of the information firm in Mainland China is a innovation progress of different stages. Moreover, this study reveals the fact the development of the firm must match up external industry environment. Under the circumstance, the firm can evolve its unique growth path and make sustained progress.

This research is to analyze the growth and evolution process of the Chinese enterprise group in China market place base on longitudinal perspective. In accordance with the finding of this study, we propose an integrated process model to explain the growth path and so does the dynamic mechanism among these dimensions in the model. The findings of this study are stated as below: 1. The integrated model of the evolution process Through the case study of Chai-Tai group in China, we consider the evolution and growth process is part of its internationalization activities. The dynamic interaction among the three dimensions of this model and the path dependence of each stage constitute the characteristics of this model. 2. The meaning of the un-related diversification strategy The growth strategy of the Chinese Business groups is deeply affected by their specific social network or guanxi, entry timing and the industry/business environment situation. Un-related diversification is a common selected strategy of these Chinese business groups. But they are usually suffering from the delusion of business focus and cannot produce synergy from the un-related business units. Consequently, the un-related diversification strategies are without benefits for the enterprises to maintain their market position and develop their core competences.

Yes / This paper examines the role of business groups (BGs) in the relationship between innovation and exports. In the light of the divergent theoretical predictions on the role of BGs, we develop hypotheses that are explicitly based on the institutional context of emerging economies. By analyzing the institutional pressures under which BGs shape their strategies and operations, we formulate hypotheses on the effect of BG affiliation on exports, and the impact of innovation on exports. Empirical results, based on a large sample of Chinese manufacturing firms during the period of 1998-2007, show that both innovation and BG affiliation have a positive effect on exports, although BG affiliation weakens the positive value of innovation to exports. These findings are robust in different specifications. This paper highlights the complex role played by BGs, which needs to be understood in the context of institutions.

This research was inspired by a particular business problem – the search for an optimal model of strategy-making process in Severstal, a major Russian metals and mining company going through a period of rapid growth and transformation. The research reports on the results of a longitudinal explorative case study based on two distinct empirical projects. The first project addressed strategy process nature, participants, roles of corporate centre, time perspective and impact of the external environment. Its results highlighted the importance of CEO leadership and personal traits, which became the principal focus of the second empirical project. The key empirical contribution of the research was definition of "leader-focused decentralisation" as a particular approach to strategy-making in a multi-business group. This approach combines decentralized, bottom-up, business units-led generation of strategic proposals and initiatives with a crucial role of a company leader as a deeply involved decision-maker, presiding over a small and lean corporate centre with minimal corporate rules and bureaucracy. In Severstal’s case, the "leader-focused decentralisation" approach to strategy was a good match to its volatile yet rewarding external environment. The suggested model can be seen as an empirically-derived step towards a theoretical synthesis of "activist" vs. "detached" views of corporate centre roles in relation to strategy process in multi-business firms. It exhibited some distinctive features which were not yet described in other contexts, including co-existence of strong entrepreneurial leadership and organisational decentralisation. From a practical standpoint, the research highlighted weaknesses and limitations of existing strategy-making model and offered a background for the discussion of ways to develop it in the future.

A presente dissertação tem como objetivo demonstrar a inexistência de responsabilidade tributária de grupo econômico no ordenamento jurídico brasileiro. Para tanto, na primeira de três partes, expõe os conceitos normativos fundamentais a partir dos quais será desenvolvido o estudo. A segunda parte do trabalho divide-se em duas seções, a primeira destinada a estabelecer o que se deve entender por grupo econômico e a segunda voltada à análise da responsabilidade tributária e da sua compatibilidade com o grupo. A terceira parte direciona-se à crítica do emprego impreciso do conceito de grupo de sociedades e dos seus efeitos em situações nas quais a existência de grupo não é relevante ou sequer tratam de responsabilidade tributária. Para sustentar a conclusão proposta, o trabalho apresenta como principais argumentos a incompatibilidade com o sistema tributário nacional da garantia – no sentido de atribuição do risco da solvência do crédito tributário em prejuízo do patrimônio do particular – como finalidade das regras de responsabilidade tributária; a reserva de lei complementar a que está submetida a disciplina da sujeição passiva tributária e que veda a responsabilização por meio de lei ordinária; a necessidade do emprego da técnica do argumento e contrario na interpretação da responsabilidade de terceiros em razão da taxatividade dos enunciados previstos no CTN (hipóteses de antecedente fechado), da excepcionalidade da responsabilidade tributária e da proibição à analogia; e a inaptidão das hipóteses de solidariedade para a atribuição de responsabilidade tributária, seja por interesse comum, seja por previsão legal. Busca ainda evidenciar que a formação de grupo econômico pelo exercício do controle societário sobre uma pluralidade de sociedades não pode ser utilizada como elemento comprobatório de confusão patrimonial ou de desvio de finalidade para fins de desconsideração da personalidade jurídica, pois é indiferente em relação a esses vícios. / This paper aims to demonstrate the absence of tax liability of business groups in the Brazilian legal system. To do so, the first of three parts presents the fundamental regulatory concepts from which the study will be developed. The second part of the paper is divided into two sections, the first one intended to establish what should be understood as a business group and the second one is focused on analysis of tax liability and its compatibility with the group. The third part is focused on criticism of inaccurate use of the concept of group of companies and its effects in situations where the existence of a group is not relevant or not even relates to tax liability. To support the proposed conclusion, the paper presents as its main arguments the incompatibility of the guarantee with the national tax system – in the sense of risk allocation of the solvency of tax credit at the expense of the equity of private persons – as the purpose of tax liability rules; the reservation of complementary law, which the tax liability is subject to, and which bars such due through ordinary law; the need for the use of the technique of argumentum e contrario in the interpretation of third-party liability due to the specificity of those rules laid down in the Brazilian Tax Code (rules of closed antecedent), the exceptionality of tax liability and the ban on analogy; and the inadequacy of the assumptions of joint and several liability for the allocation of tax liability, either by common interest, or by legal provision. It seeks further to show that the formation of a business group by the exercise of corporate control over a plurality of companies cannot be used as evidentiary element of commingling of equity or misapplication of purpose for piercing of the corporate veil, given that it is indifferent to those flaws.