1 Is there tunneling in Small Business Groups?

Using a unique firm level data set on ownership and balance sheet information, we test for the influence of the separation between ownership and control on firm performance and risk. This paper fills a gap in the empirical governance literature on the agency cost of pyramidal control by investigating if it is influenced by group size. It also shed light on the use of complex ownership structure for risk management. This paper investigates the interaction between complex ownership structure and group size on firm individual performance and risk. Results point out that corporate governance issues related to complex ownership structures are influenced by group size. They also support the idea that risk management practices cannot be understood in a corporate governance perspective without consideration of group size