Product Market Competition and the Ownership Choice of Business Groups: Evidence from Korean Chaebols
- Authors
- Byun, Hee Sub; Lee, Ji Hye; Park, Kyung Suh
- Issue Date
- 2018
- Publisher
- ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
- Keywords
- business group; controlling shareholder; disparity; private benefit of control; product market competition
- Citation
- EMERGING MARKETS FINANCE AND TRADE, v.54, no.1, pp.100 - 131
- Indexed
- SSCI
SCOPUS
- Journal Title
- EMERGING MARKETS FINANCE AND TRADE
- Volume
- 54
- Number
- 1
- Start Page
- 100
- End Page
- 131
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/80960
- DOI
- 10.1080/1540496X.2016.1240675
- ISSN
- 1540-496X
- Abstract
- This study investigates the effect of product market competition on the ownership choice of controlling shareholders in the Korean business groups known as chaebols. We find that member firms in more competitive markets have less disparity between the control and cash flow rights of controlling shareholders. The adjustment in ownership due to product market competition is implemented mainly through an adjustment in the ownership of affiliates rather than in the direct ownership of controlling shareholders. The disciplinary effect of product market competition is observed only in member firms with lower market power in their own industries. The result implies that product market competition works as a disciplinary mechanism that reduces the incentive of chaebols' controlling shareholders to pursue the private benefits of control.
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Collections - Korea University Business School > Department of Business Administration > 1. Journal Articles
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