Investment efficiency of firms outside the business group
- Authors
- Liu, Yunxiao; Kim, Woochan; Sung, Taeyoon
- Issue Date
- 12월-2021
- Publisher
- ELSEVIER
- Keywords
- Business group; Capital allocation efficiency; Financial sector development; Internal capital market; Investment efficiency; Investor protection
- Citation
- JOURNAL OF CORPORATE FINANCE, v.71
- Indexed
- SSCI
SCOPUS
- Journal Title
- JOURNAL OF CORPORATE FINANCE
- Volume
- 71
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/135587
- DOI
- 10.1016/j.jcorpfin.2021.102105
- ISSN
- 0929-1199
- Abstract
- Using Korean firms between 1987 and 2010, we show that non-group firms suffer more from investment inefficiency if they operate in industries where group firms belong to larger business groups. We also find that this effect exists mainly during a period characterized by a capital supply shortage and low cash flow pledgeability to investors. Further analyses indicate that the effect is attributable not to human capital constraints, but external financing constraints imposed by business group firms and that causality runs from business group strength to investment inefficiency of non-group firms.
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Collections - Korea University Business School > Department of Business Administration > 1. Journal Articles
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