Corporate governance and firm value: evidence from the Korean financial crisis

Baek, Jae-Seung; Kang, Jun‐Koo; Park, Kyung Suh

doi:10.1016/s0304-405x(03)00167-3

Cited by 696 publications

(596 citation statements)

References 38 publications

Supporting

Mentioning

533

Contrasting

Unclassified

Order By: Relevance

“…Hence, firm size and growth opportunities are expected to be positively related to firm performance. Baek, Kang, and Park (2004) find a positive relationship between firm size and firm value. A similar result is reported by Chen (2010).…”

Section: Variablesmentioning

confidence: 83%

Does ownership matter in publicly listed tourism firms? Evidence from Jordan

Al‐Najjar

2015

Tourism Management

View full text Add to dashboard Cite

This paper aims to provide new evidence on the relationship between ownership structure and firm performance. Unlike the previous empirical studies in the area of firm performance, we examine this relationship within a unique setting of publicly listed tourism firms. Our contribution is extended by investigating this relationship in Jordan as an emerging market and a famous tourist destination in the region. This is an interesting setting since ownership is more concentrated in the investigated firms. Our results show that institutional investors are self-opportunistic and negatively affect firm performance. In addition, we report a negative relationship between foreign ownership and firm performance. Furthermore, we detect that mutual funds have a positive impact on firm performance. Finally, the findings of this paper provide interesting empirical implications to academics and policy makers.

show abstract

Section: Variablesmentioning

confidence: 83%

Does ownership matter in publicly listed tourism firms? Evidence from Jordan

Al‐Najjar

2015

Tourism Management

View full text Add to dashboard Cite

show abstract

“…Voting and cash-flow rights divergence increases the risk of minority shareholder expropriation because it gives the dominant shareholder both the ability and the incentive to derive private control benefits. Empirical studies usually show that excess voting rights adversely affect firm performance when the dominant shareholder's share of the equity (cash-flow rights) is small (for example, Claessens et al, 2002;Mitton, 2002;Baek et al, 2004;Bozec and Laurin, 2008).…”

Section: Governance-performance Relationship and Ownership Concentrationmentioning

confidence: 99%

“…These practices are quite common among publicly traded companies outside the United States and the United Kingdom as they allow continued founders control over a company while injecting new equity. However, dual-class/multiple voting shares, pyramidal and cross-ownerships structures create a separation between voting rights and cash-flow rights that increases expropriation costs and adversely affects firm performance (for example, Claessens et al, 2002;Mitton, 2002;Baek et al, 2004;Bozec and Laurin, 2008). Finally, prior studies only controlled for one aspect of endogeneity, that is, reverse causality or spurious correlation, and generally offered a weak cross-validation of the mitigating effect of ownership concentration on the governanceperformance relationship.…”

Section: Introductionmentioning

confidence: 99%

Governance practices and firm performance: Does shareholders’ proximity to management matter?

Bozec

Dia

2014

Int J Discl Gov

View full text Add to dashboard Cite

Richard Bozecis a Full Professor of Accounting at the Telfer School of Management, University of Ottawa where he currently teaches advanced financial accounting courses. He is joining the growing number of researchers in the field of corporate governance who are shifting to more holistic analytical approaches, taking into account the variety of controls that interact to affect a firm's performance. ABSTRACT This article investigates the link between corporate governance practices and firm performance, a topic that received a lot of attention by regulators, interest groups and academics. Research in this field has recently shifted from the analysis of one or more specific governance provisions to the analysis of multiple aspects of corporate governance. In fact, most studies now use corporate governance indexes that capture a wide range of corporate governance provisions (index-based studies). The objective and main contribution of this article is to revisit the governance-performance relationship while taking into account shareholders' proximity to the locus of management. Shareholders' proximity is defined based on ownership concentration and whether or not the dominant/controlling shareholder holds top executive positions in the firm. The lowest level of proximity is evidenced in firms with dispersed ownership, the highest level in controlled entities where the controlling shareholder holds the CEO and/or Chair positions. Governance is measured on a global scale using the Report on Business (ROB) index. The study is conducted over a 4-year period (2002)(2003)(2004)(2005) using panel regressions in a two-stage least squares framework on a sample of Canadian publicly traded companies (470 firm-year observations). The results of the study show a positive relationship between the ROB global index (and sub-indexes) and Tobin's Q whether ownership is dispersed or is concentrated in the hands of a dominant or controlling shareholder. Shareholders' proximity to management has no impact on the governance-performance relationship. Overall, the results support a one-size-fits-all approach to governance, a policy adhesion that underlined the widespread adoption of Codes of Good Governance and legal/ regulatory changes in the years following Enron's collapse in the United States. Initiatives were in large part supported by a general consensus toward a stock market-centered model of governance. However, with the recent debt crisis in the United States, public perception has changed. The credibility of such a model for governing our institutions is called into question. Our study tempers these concerns by showing that governance controls should not account for ownership differences in the context of publicly traded companies. Instead, good governance practices based on an independent board of directors that promotes transparency and protects shareholders' rights should be prioritized whether or not ownership is dispersed or concentrated. From a corporate governance standpoint, this study sheds new light on controlled compani...

show abstract

“…The literature on corporate ownership shows that the separation between ownership and control has an important implication for firm performance (La Porta, Lopez-de-Silanes, Shleifer, & Vishny, 2002;Claessens et al, 2002;Baek, Kang, & Park, 2004). The literature suggests that pyramidal ownership may reduce firm performance (e.g., Claessens et al, 2002;Joh, 2003).…”

Section: Stock-control Rightsmentioning

confidence: 99%

The Managerial Control Types of Conglomerates and Firm Performance

Chiang¹,

Lin²

2011

International Journal of Financial Research

View full text Add to dashboard Cite

This paper investigated the relationship among board leadership structure, shareholder rights, the divergence of responsibilities, and firm performance under a variety of conglomerate-controlling behaviors. Results revealed a negative correlation among chief executive officer (CEO) duality and deviations from stock-control rights, earnings-distribution rights, seat-control rights, and stock-control rights on a single family-controlled company's performance. The ratio of shares held by directors and independent directors significantly correlated with the level of company performance. This may explain the relationship of current board composition in Taiwanese-listed companies' structure and the phenomenon of business performance. The manager-controlled type is common in Taiwan's electronics industry. We determined that, apart from the significant positive correlation between the numbers of independent directors and company performance, the remaining outcomes of the primary variables were not significant. This illustrates that the controller of the company is the professional manager. The correlation between the structure of the board of directors and company performance was found to be minimally significant. However, independent directors were still found to act as important oversight mechanisms.

show abstract

Corporate governance and firm value: evidence from the Korean financial crisis

Cited by 696 publications

References 38 publications

Does ownership matter in publicly listed tourism firms? Evidence from Jordan

Does ownership matter in publicly listed tourism firms? Evidence from Jordan

Governance practices and firm performance: Does shareholders’ proximity to management matter?

The Managerial Control Types of Conglomerates and Firm Performance

Contact Info

Product

Resources

About