PYRAMIDAL BUSINESS GROUPS IN CHINA

Pyramidal Business Groups in China

Pyramidal Business Groups in China

Introduction

The purpose of this paper is to empirically analyze the motive of pyramidal business groups to pay cash dividends in China. The paper also discusses pyramidal business groups in China and their tunnelling and dividend patterns.

Classically, one represents the group of companies as a pyramid of companies based on equity that the parent owns in the capital of its subsidiaries. In this perspective, it is held by a financial company in the capital of other companies that characterizes the group's existence. However, today, groups of companies no longer rely necessarily on one pyramidal organization or on a system of equity. Rather than focusing on a particular form of "vertical integration". Groups seeking to support their development of networks of small and medium units and scattered independent remaining connected to each other in a desire to exchange, interdisciplinary, responsiveness and ultimately transfer value.

Groups seeking to refocus on their core business and to this end, they rely on techniques including outsourcing, via a set of contracts and outsourcing of commercial exploitation such as the franchise or the right. This cooperation requires extensive coordination between the company and its partners and maintaining strong links between the various network interfaces. For this purpose, it is not uncommon for some companies offer a logistical and technical support to their partners and participate in their education. To ensure that they develop expertise in line with their expectations, to adapt their production methods and integrate their culture and values.



This has resulted in the development in some sectors, such as automotive and aeronautics, an outsourcing might be termed "captive", because more and more subject to political and health group master builder or contractor. In this context, some companies naturally tend to act as pilot. The pilot is one who gives meaning and strategic impact force to the network. It cements and coordinates relations between its members. Some companies or corporations are under the domination of others.

This domination is not the result of financial contributions made ??by dominant firms. What matters here is not the link between financial companies but the notion of power. In other words, what characterizes the group of companies today is that it is a monitor economic masked by the apparent legal independence of its component companies. The group of companies is a factual situation characterized by the control of certain companies over others to promote a common interest. This control is the power to determine a company directly or indirectly, due to rights or contracts, the policy of another company. This power is exercised the common feature of both the classical structures of groups of companies where power is the result of financial contributions, as more recent forms of groups where power is the result of economic domination through certain contracts (Chen et al. 2008, 60).

The problem lies in the current context that makes a whole, the second generation of the family is less than the first for ...