Family Control and Pyramid Structure: A Preliminary Study by Family Business Groups in Taiwan's Textile and Construction Investment Industry

摘要

This study examines the pyramid structure and deviation between control rights and cash flow rights by investigating four family business groups in Taiwan's textile and construction investment industry, respectively. From agency theory viewpoint, this study finds that those family business groups on these two industries all utilize pyramid structures to enhance family control when the group's scales and scopes grow during the 1992 to 2004 time period. The pyramid structure of those family business groups in construction investment industry reveals a progressively increasing tendency during the time period; moreover, the average degree of pyramid structures by those family business groups in this industry is higher than those ones in textile industry. The degree of deviation by those family business groups in these two industries is similar to each other. The finding in this study can provides preliminary comparative start-point in discussing control and coordination issues in family business groups. Furthermore, it also provides referable values in discussing the family business groups in Great China societies.