The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 22 May 2026 11:32:50 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Alibaba: A Case Study of Synthetic Control – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Alibaba: A Case Study of Synthetic Control https://corpgov.law.harvard.edu/2020/08/11/alibaba-a-case-study-of-synthetic-control/?utm_source=rss&utm_medium=rss&utm_campaign=alibaba-a-case-study-of-synthetic-control https://corpgov.law.harvard.edu/2020/08/11/alibaba-a-case-study-of-synthetic-control/#comments Tue, 11 Aug 2020 13:23:59 +0000 https://corpgov.law.harvard.edu/?p=131754?d=20230309153550EST Posted by Jesse M. Fried (Harvard Law School) and Ehud Kamar (Tel Aviv University), on Tuesday, August 11, 2020
Editor's Note:

Jesse M. Fried is Dane Professor of Law at Harvard Law School and Ehud Kamar is Professor of Law at Tel Aviv University Buchmann Faculty of Law. This post is based on their recent paper. Related research from the Program on Corporate Governance includes The Perils of Small-Minority Controllers by Lucian Bebchuk and Kobi Kastiel (discussed on the Forum here).

Alibaba conducted a record-breaking IPO six years ago on the New York Stock Exchange and is now valued at over $500 billion. The firm, founded by Jack Ma and others, is now the most valuable Asian public company, as well as the world’s largest ecommerce company and seventh most valuable firm. In a paper recently posted on SSRN, Alibaba: A Case Study of Synthetic Control, we explain how this giant firm is controlled.

Alibaba is known for its unique governance structure: a majority of Alibaba’s board is nominated or appointed by the so-called Alibaba Partnership, which consists of several dozen individuals. Thus, the Partnership controls Alibaba. However, as Lin and Mehaffy (2016) show, the Partnership itself is effectively controlled by a much smaller Partnership Committee that includes Ma as a perpetual member. Control of Alibaba is therefore in much fewer hands than might first appear.

Our paper digs even deeper into Alibaba’s control arrangements and reveals a surprising fact: Ma, who owns less than 5% of Alibaba, effectively controls Alibaba by himself—control that would persist even if his equity stake declined further. The reason is that Ma’s control over Alibaba is not based on his equity but rather on his control of a different firm, Ant Group.

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