This paper examines the determinants of allocation of decision rights between the parent company and its subsidiaries, and the economic consequence of suboptimal power structure. Based on China's unique double-disclosure for the parent company and the whole group, we construct a decentralization...

In this paper, we empirically examine whether clan culture in China, an extant informal institution established 2,000 years ago, affects corporate cash holdings. We use city-level pedigree density as a proxy for clan culture and find that private firms deeply entrenched in clan culture are less...