Corporate governance, product-market competition, and stock returns: evidence from the Korean market
Doojin Ryu () and
Joon Ho Hwang
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Doowon Ryu: Korea University Business School
Doojin Ryu: Sungkyunkwan University
Joon Ho Hwang: Korea University Business School
Asian Business & Management, 2017, vol. 16, issue 1, 50-91
Abstract This study examines the relationship among market competition, corporate governance, and stock returns in Korea, a representative emerging market. We find that the relation between product-market competition and a firm’s stock return is insignificant, but that better corporate governance is associated with a lower adjusted stock return when market competition intensifies in more competitive industries; This relationship is not evident in less competitive industries. Thus, the effects of corporate governance on stock returns depend on market-competition levels. We offer important empirical evidence by showing that the effects of corporate governance and product-market competition on firms’ stock returns can vary by country and market environment.
Keywords: Market competition; Corporate governance; Stock returns; Chaebol; Korean market (search for similar items in EconPapers)
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