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Unformatted text preview: ﬁne ”inﬂuential families” that are the owners of the 60 largest business
groups. The choice of 60 is arbitrary, however. The size of these business groups, measured
by sales, ranges from 122, 039 million Baht to 6,241 million Baht (Suehiro (2000)). These
groups are owned by the following prominent families: Asakun, Assawaphokin, Bencharongkun,
Bodharmik, Boonnamsap, Bulakul, Buraphachaisiri, Charnsiri, Charnwirakun, Chiarawanon,
Chirathiwat, Choke Wattana, Chonwicharn, Chungrungruenkit, Chaiyawan, Chuturakun, the
Crown Property Bureau, Darakanon, Damnoencharnwanit, Horruagruang, Kannasut, Khachanapat, Khanathanawanit, Konutakiat, Krisdathanont, Laohathai, Lamsam, Liaophairat, Leeissaranukun, Lee-nutapong, Lee-sawattrakun, Osathanukhro, Phenchart, Pornprapha, Photirattanangkun, Phiromphakdi, Rattanarak, Sarasin, Sirimongkonkasem, Sophonpanit, Siriwat11 tanapakdi, Srifuengfung, Sriwikorn, Suoson, Taechaphibun, Taephaisitphong, Tangmatitham,
Thienprasidda, Uachukiat, Umput Wang Lee, Wiriyaprapaikit, Wattanawekin, Wiriyaphan,
We deﬁne ﬁrms as connected to these inﬂuential families if any of these families own at
least a 10 percent stake in the ﬁrms. According to the Thai corporate law, a shareholder is
a major shareholder if he owns at least 10 percent of the shares (Stock Exchange of Thailand
(1997)). With this level of shareholdings, a shareholder can control the ﬁrm in the following
manner. He has the right to submit a motion to the court for the company’s liquidation if
i.) management fails to act in accordance with the provisions relating to payments of stock
issuance and transferring of ownership, ii.) the number of shareholders is less than 15, and iii.)
the company is in ﬁnancial distress and has no possibility of recovering (see Wiwattanakantang
As shown by the family names, business groups not only proxy strong political connections
but also the close ties that the big business groups have with banks and ﬁnance companies. Our
results show that 96 ﬁrms or 35.56 percent of ﬁrms in our sample are aﬃliated to these connected
families. Among these families, the Crown Property Bureau, Lamsam, Rattanarak, Sophonpanit, Taechaphibun, and Wang Lee own and control banks, ﬁnance and insurance companies.
In fact, they are also the founders of the banks. Except for the Crown Property Bureau, the
controlling families of these banks have been involved in management as top executives. There
are 31 ﬁrms which accounts for 11.48 percent of the sample where the controlling shareholders
are the major shareholders of banks and ﬁnance companies (Table 3).
With respect to the connections with banks via the board of directors, we deﬁne the board
connections in a similar manner to Kroszner and Strahan (2001a). Speciﬁcally, a ﬁrm has
connections with the bank board when at least one member of the ﬁrm’s board serves on the
boards of banks and ﬁnance companies. Out of 270 ﬁrms in the sample, 186 ﬁrm...
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This document was uploaded on 02/28/2014 for the course ECONOMICS fn314 at Harvard.
- Fall '13