Internal capital markets of Korean chaebols

Jieun Im, Woojin Kim and Inmoo Lee

Chapter 5 in Research Handbook on Alternative Finance, 2024, pp 85-115 from Edward Elgar Publishing

Abstract: This chapter reviews cases, anecdotal evidence and academic studies on internal capital markets of Korean chaebol firms. Chaebols are business groups that are typically controlled by founding families and are known to have active internal capital markets. While internal capital markets may relax financial constraints and allow firms to effectively finance investment opportunities, financial transactions among member firms may benefit controlling families at the expense of minority shareholders. We present evidence consistent with both bright and dark sides of internal capital markets of chaebols, and discuss some factors likely to affect the allocative efficiency of internal capital markets.

Keywords: Asian Studies; Business and Management; Economics and Finance; Innovations and Technology (search for similar items in EconPapers)
Date: 2024
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