Business group heterogeneity and firm outcomes: Evidence from Korean chaebols

Romain Ducret and Dusan Isakov

Global Finance Journal, 2024, vol. 63, issue C

Abstract: This study examines how business group heterogeneity affects firm outcomes using data from Korean chaebols (2007–2019). We employ a three-level empirical strategy considering: 1) market-level average effects, 2) effects across categories of business groups, and 3) group-specific effects capturing unobservable attributes. Our analysis reveals substantial variations in affiliation effects between business groups, often diverging from average market-level effects. We find that group resources significantly impact affiliate performance - investors assign higher valuations to firms affiliated with large, financially sound, and well-performing business groups. While performance effects are primarily market-driven, we document considerable heterogeneity in financial and investment policies across groups, likely influenced by unobservable characteristics such as controlling shareholders' preferences. Our findings highlight the importance of considering business group heterogeneity when analyzing affiliate performance

Keywords: Business groups; Performance; Corporate policies (search for similar items in EconPapers)
JEL-codes: G30 G32 G35 L22 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1044028324001285
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Business group heterogeneity and firm outcomes: Evidence from Korean chaebols (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:63:y:2024:i:c:s1044028324001285

DOI: 10.1016/j.gfj.2024.101056

Access Statistics for this article

Global Finance Journal is currently edited by Manuchehr Shahrokhi

More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).