Allocation of Decision Rights Between the Parent Company and Its Subsidiaries
利用中国母公司及集团双重披露数据构建分权指数，研究母子公司间决策权分配的决定因素及次优权力结构的经济后果。
This article 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 index to measure how decision rights are allocated within the group companies. We find a more decentralized (centralized) power structure for the groups with more uncertain (certain) external environment and with poorer (better) internal information quality. We also show that the groups with suboptimal power structure have weaker future performance.