South Korea's efforts for structural changes in corporate governance of large Korean business groups after the Asian financial crisis

2013 ◽  
Vol 11 (3) ◽  
pp. 211-230 ◽  
Author(s):  
Pyung K Kang ◽  
Yoo Chan Kim
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Structural Changes ◽  
Business Groups ◽  
Asian Financial Crisis

The Next Stage of Reforms: Korean Corporate Governance in the Post-Asian Financial Crisis Era

2006 ◽  
Vol 1 ◽  
pp. 1-23
Author(s):  
Joongi Kim
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Boards Of Directors ◽  
Corporate Control ◽  
Asian Financial Crisis ◽  
Governance Framework ◽  
Quantum Leap ◽  
World Class

AbstractFollowing the 1997 financial crisis, Korea underwent a dramatic overhaul of its corporate governance framework. Drastic changes in its legal and regulatory infrastructure led to more transparent and accountable companies. Boards of directors, shareholders, stakeholders, and auditors began to function effectively and even a corporate control market emerged. Many forms of internal and external corporate governance and market-oriented discipline were established. Korean companies are poised to make a quantum leap to reach the most competitive international levels of corporate governance. This paper argues that Korea must continue its reform efforts. It first discusses the Asian financial crisis and the first stage of reforms that followed. It then explores the areas where Korea needs to undergo the next stage of reforms. It will argue that only then can Korean corporations receive proper valuations. Korean companies have indeed come a long way but lingering perceptions of weak corporate governance thwart them from becoming world-class competitors.

scholarly journals Korean Business Groups and Performance of Group-Affiliated Professional Sport Teams: Focusing on the Asian Financial Crisis

2020 ◽  
Vol 12 (17) ◽  
pp. 6888
Author(s):  
Youngshin Woo ◽  
Wooseok Choi ◽  
Insik Min ◽  
Mugoan Jeong
Keyword(s):  
Financial Crisis ◽  
Business Groups ◽  
Professional Sports ◽  
Asian Financial Crisis ◽  
Time Interval ◽  
Sports Teams ◽  
Sport Teams ◽  
Athletic Success ◽  
And Performance ◽  
The Impact

This study examines the impact of Korean business groups, chaebols, on the sporting performance of their affiliated professional sports teams using game data from 1983 to 2013. We investigated whether or not chaebol ownership of professional sports teams is more efficient than non-chaebol ownership in achieving athletic success on the field of play. Our empirical evidence found that the chaebol-affiliated teams are more likely to be the league winners or finalists than non-chaebol teams are. We also tested the relationship between the financial crisis in the wider economy that deflates firm resources and athletic outcomes in the affiliated teams. In the tests, which divide the sample period into three 10-year periods, the results of two sub-samples (1983–1993 and 2004–2013) were in line with previous results. We, however, identified an exception when chaebol teams did not play in more final matches of a league between 1994 and 2003, the time interval that includes the period of drastic restructuring of business groups during the 1997 Asian financial crisis.

Financial Weakness and Product Market Performance: Internal Capital Market Evidence

2016 ◽  
Vol 51 (1) ◽  
pp. 307-332 ◽  
Author(s):  
Ryoonhee Kim
Keyword(s):  
Financial Crisis ◽  
Market Share ◽  
Capital Market ◽  
Business Groups ◽  
Asian Financial Crisis ◽  
Financial Leverage ◽  
High Group ◽  
Data Set ◽  
Internal Capital Market ◽  
Negative Effect

AbstractUsing a data set of Korean business groups in the period 1999–2006, just after the Asian Financial Crisis, this study shows how business groups’ financial leverage can lead group-affiliated firms to lose market share to industry rivals. This analysis reveals that the negative effect of group leverage is greater when an affiliated firm is financially weak. Additionally, high group leverage is more detrimental to firms operating in fast-growing industries, discouraging affiliated firms from investing while encouraging their rivals. The results suggest that groups’ financial positions encompass a substantial strategic dimension of group-affiliated firms.

scholarly journals Demand Uncertainty, Cost Behavior, and the Asian Financial Crisis: Evidence from Korea

2019 ◽  
Vol 11 (8) ◽  
pp. 2238
Author(s):  
Dae-Hyun Kwon
Keyword(s):  
Financial Crisis ◽  
Loss Aversion ◽  
Demand Uncertainty ◽  
Structural Changes ◽  
Environmental Changes ◽  
Asian Financial Crisis ◽  
Cost Structure ◽  
Congestion Costs ◽  
Cost Behavior ◽  
Using Data

The mix of fixed and variable costs in response to environmental changes is important for the sustainability of a firm. This study examines how demand uncertainty affects managers’ cost structure decisions. Using data on Korean firms from 1982 to 2015, my study provides evidence that cost rigidity increases in demand uncertainty. This finding implies that managers under higher uncertainty will increase the committed capacity to reduce congestion costs, resulting in a more rigid (less elastic) cost structure with higher fixed and lower variable costs in the short term. I also investigate the effect of the 1997 Asian financial crisis on cost rigidity. I predict that the massive structural changes entailed by the crisis, such as the deteriorated access to external funds, increase in the tendency of loss aversion, and expansion of outsourcing and temporary job positions, will reduce the magnitude of cost rigidity following greater demand uncertainty. Consistent with the prediction, the positive relation between demand uncertainty and cost rigidity becomes weaker in the period following the crisis, compared to the pre-crisis period.

The Value of Outside Directors: Evidence from Corporate Governance Reform in Korea

2007 ◽  
Vol 42 (4) ◽  
pp. 941-962 ◽  
Author(s):  
Jongmoo Jay Choi ◽  
Sae Woon Park ◽  
Sean Sehyun Yoo
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Asian Financial Crisis ◽  
Independent Directors ◽  
Board Composition ◽  
Governance Reform ◽  
Outside Directors ◽  
Family Control ◽  
Indigenous Institutions ◽  
Corporate Governance Reform

AbstractThis paper examines the valuation impacts of outside independent directors in Korea, where a regulation requiring outside directors was instituted after the Asian financial crisis. In contrast to studies of U.S. firms, the effects of independent directors on firm performance are strongly positive. Foreigners also have positive impacts. The effects of indigenous institutions such as chaebol or family control are insignificant or negative. This implies that the effect of outsiders depends on board composition as well as the nature of the market in which the firm operates.

scholarly journals Corporate governance in Indonesian state-owned enterprises: Feeding with western ingredients

2007 ◽  
Vol 4 (2) ◽  
pp. 205-215
Author(s):  
Frederik G. Worang ◽  
David A. Holloway
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Corporate Culture ◽  
Qualitative Interview ◽  
Asian Financial Crisis ◽  
Interview Data ◽  
Governance Practices ◽  
Western Nations ◽  
Managerial Level

Corporate frauds and failures in Indonesian have continued despite the corporate governance principles of Indonesia’s State-Owned Enterprises (SOEs) which have been strengthened following the Asian financial crisis of 1997/1998. This appears to indicate that corporate governance principles primarily adopted from developed Western nations are not adequate to address problems faced by SOEs in Indonesia. This primarily analytical paper evaluates the current corporate governance practices in Indonesian SOEs in light of the prevailing political and corporate culture. Given the complexity of Indonesia’s political and corporate culture the adoption of corporate governance principles from Western nations as promulgated by the OECD and/or the Cadbury report are inadequate to reduce corporate mismanagement and failure among SOEs. The study also utilizes some qualitative interview data from thirty respondents at managerial level within three SOEs to aid the assessment of corporate governance practices and principles in the Indonesian context

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