Should business groups be in finance? Evidence from Indian mutual funds
成果类型：
Article
署名作者：
Anagol, Santosh; Pareek, Ankur
署名单位：
University of Pennsylvania; Nevada System of Higher Education (NSHE); University of Nevada Las Vegas
刊物名称：
JOURNAL OF DEVELOPMENT ECONOMICS
ISSN/ISSBN：
0304-3878
DOI：
10.1016/j.jdeveco.2019.03.007
发表日期：
2019
页码：
229-248
关键词：
摘要：
A primary risk associated with business groups entering the financial sector is that groups will misallocate capital to own group firms, hurting investors and economic development. We study this issue in the context of business group owned mutual funds in India, where business groups have been present for over twenty years, and we can observe capital allocation decisions monthly. Business-group owned funds do not over-weight member firms, nor do they prop up member firm stocks or earn excess returns on their member firm investments. Business-group funds have an advantage when they focus on industries where the group operates, although we cannot distinguish whether this is due to insider trading versus (legal) specialization. Current regulations appear sufficient to prevent capital misallocation in member firms, but monitoring of investments in related sectors seems warranted.