Infant firms in emerging market: An analysis of stand-alones vs. subsidiaries
Soo Jin Kim,
Woojin Kim (woojinkim@snu.ac.kr) and
Dong Ryung Yang
Emerging Markets Review, 2015, vol. 25, issue C, 30-52
Abstract:
Newly established manufacturing firms in Korea without any corporate shareholder participation — stand-alones — exhibit significantly higher profitability and smaller asset size compared to those set up by corporate shareholders — subsidiaries. This pattern holds even for stand-alones and subsidiaries set up by the same controlling shareholder. Such differences in profitability do not seem to be driven by inherent differences in business risk nor reflected in post-establishment survival rates. Moreover, infant firms' overall profitability depends more on internal transactions with affiliated firms than external transactions.
Keywords: Stand-alone; Subsidiary; Pyramid; Business group; Related party transaction; Korea (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:25:y:2015:i:c:p:30-52
DOI: 10.1016/j.ememar.2015.04.003
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