• Asian crisis;
  • corporate governance;
  • separation of control and cash flow rights;
  • separation of control and management;
  • owner managed family firms;
  • capital structure;
  • firm value;
  • 3SLS estimates with error components;
  • simultaneity bias
  • G32;
  • L25


The present paper examines the effects of ownership structures on capital structure and firm valuation. It argues that the effects of separation of control from cash flow rights on capital structure and firm value also depend on the separation of control from management as well as on legal rules and enforcement defining investors’ protection. We obtain firm-level panel data (three stage least squares, 3SLS) estimates from four of the East Asian countries worst affected by the last crisis. There is evidence that the general wisdom that higher control than cash flow rights may lower firm value may be reversed among owner-managed family firms in the sample countries.