Unbundling and measuring tunneling

Vladimir Atanasov, Bernard Black*, Conrad S. Ciccotello

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review

20 Scopus citations


Managers and controlling shareholders can extract ("tunnel") wealth from firms in many different ways. We develop a framework for analyzing what we see as the four main types of "tunneling" transactions: cash flow tunneling, asset tunneling "out," asset tunneling "in," and equity tunneling. We develop a simple model of how each type of tunneling affects accounting and share price metrics, develop implications for asset pricing models, and illustrate our approach with several case studies. Our framework can help regulators design more effective antitunneling rules, help investors and analysts evaluate tunneling risk, and help shareholders provide evidence on harm from tunneling in litigation.

Original languageEnglish (US)
Pages (from-to)1697-1738
Number of pages42
JournalUniversity of Illinois Law Review
Issue number5
StatePublished - Jan 1 2014

ASJC Scopus subject areas

  • Law


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