Topic
Chaebol
About: Chaebol is a research topic. Over the lifetime, 662 publications have been published within this topic receiving 14964 citations.
Papers published on a yearly basis
Papers
TL;DR: In this article, the authors examine whether firms belonging to Korean business groups benefit from acquisitions they make or whether such acquisitions provide a way for controlling shareholders to increase their wealth by increasing the value of other group firms.
Abstract: We examine whether firms belonging to Korean business groups ~chaebols! benefit from acquisitions they make or whether such acquisitions provide a way for controlling shareholders to increase their wealth by increasing the value of other group firms ~tunneling!. We find that when a chaebol-affiliated firm makes an acquisition, its stock price on average falls. While minority shareholders of a chaebolaffiliated firm making an acquisition lose, the controlling shareholder of that firm on average benefits because the acquisition enhances the value of other firms in the group. This evidence is consistent with the tunneling hypothesis. RECENT EMPIRICAL EVIDENCE SUGGESTS that business groups in developing countries can facilitate efficient allocation of capital and managerial resources. Khanna and Palepu ~1997, 2000! argue that business groups in developing countries mimic the beneficial functions of market mechanisms that are present only in advanced economies. When a particular market mechanism is not well developed or accessible, a business group can add value by providing member firms with alternative means of overcoming problems. For example, when a country’s external capital market is not well developed, the operation of an internal capital market within a business group enables those firms with the best projects within the group to obtain resources. 1 However, the structure of diversified business groups may create agency problems. In most business groups, ownership is highly concentrated, and
1,162 citations
TL;DR: Lee et al. as discussed by the authors examined how ownership structure and conflicts of interest among shareholders under a poor corporate governance system affected firm performance before the crisis and found that firms with low ownership concentration show low firm profitability, controlling for firm and industry characteristics.
1,054 citations
TL;DR: In this paper, the authors found that change in firm value during a crisis is a function of firm-level differences in corporate governance measures, and that firms with higher ownership concentration by unaffiliated foreign investors experienced a smaller reduction in their share value.
799 citations
TL;DR: In this article, the authors examine whether equity-linked private securities offerings are used as a mechanism for tunneling among firms that belong to a Korean chaebol, and they find that companies involved in intragroup deals set the offering prices to benefit their controlling shareholders.
Abstract: We examine whether equity-linked private securities offerings are used as a mechanism for tunneling among firms that belong to a Korean chaebol. We find that chaebol issuers involved in intragroup deals set the offering prices to benefit their controlling shareholders. We also find that chaebol issuers (member acquirers) realize an 8.8% (5.8%) higher (lower) announcement return than do other types of issuers (acquirers) if they sell private securities at a premium to other member firms, and if the controlling shareholders receive positive net gains from equity ownership in issuers and acquirers. These results are consistent with tunneling within business groups. THE WIDESPREAD USE OF PYRAMID OWNERSHIP structures and cross-holdings among firms that belong to a business group allows controlling shareholders to exercise full control over a firm despite holding a relatively small portion of its cash flow rights. 1 This divergence between ownership and control raises concerns about the degree to which the controlling shareholders of the business group siphon resources out of firms to increase their wealth, that is, the degree to which the controlling shareholders engage in tunneling (Johnson et al. (2000)). Although tunneling creates both a severe agency problem between controlling and minority shareholders and a serious friction that affects the efficient functioning of the capital market, systematic evidence of its existence is scarce. One
626 citations
TL;DR: In this article, the authors compare the investment sensitivity of Korean chaebols and non-chaebol firms and show that investment sensitivity is low and insignificant for chaebol companies but is high and significant for non-chaebol ones.
552 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2025 | 8 |
| 2024 | 10 |
| 2023 | 28 |
| 2022 | 36 |
| 2021 | 21 |
| 2020 | 17 |