The Effects of Industrial Concentration and the CSR Activities on the Firm’s Value

Ryu, Sung-Yong; Kim, Young

doi:10.17825/klr.2017.27.1.163

Cited by 1 publication

(2 citation statements)

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“…Korean chaebols are made up of several firms that operate in different markets, and they often have monopolistic positions in their markets. If the controlling shareholders use their monopolistic positions to pursue private profits, they tend to reduce CSR-related expenditures whose recovery is often uncertain [31]. The analysis indicated that if a family firm was considered a conglomerate (chaebol), it had a lower KEJI Index score.…”

Section: Discussionmentioning

confidence: 99%

“…Although monopolistic markets experience a lack of competing firms and bring easy profits [31], in a competitive market, intensifying competition can allow firms to engage in CSR to obtain competitive advantages, which leads to positive influences on their financial performance. However, in a low-competition market, it becomes easier to obtain profits without significant investment or efforts as the industry becomes more monopolized, indicating that CSR activities may become additional expenses.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

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Family Firms, Chaebol Affiliations, and Corporate Social Responsibility

Ryu

Chae

2021

Sustainability

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This study analyzes the corporate social responsibility (CSR) activities of family-owned firms by investigating public companies in Korea. By nature of their governance structures, which are aligned with the interests of their shareholders and management, family firms are managed from a long-term perspective based on a sense of ownership. While CSR implementation entails investment costs, it ultimately increases firm value by enhancing the firm’s reputation and brand image. As such, family firms are expected to be more active than non-family firms regarding CSR investments. We conducted an empirical analysis based on the Korean Economic Justice Institute Index (KEJI Index) from the Citizens’ Coalition for Economic Justice and found that family firms’ CSR scores were higher than those of non-family firms. This indicates that family firms are relatively more active in their CSR activities, as they are managed from a long-term viewpoint. However, family firms classified as large-scale corporate groups (chaebols) had lower CSR activity levels. This is because when family firms are classified as corporate groups, they can enjoy monopolistic market positioning through their subsidiaries, and are thus more likely to utilize the resources originally required for CSR in other projects that conform to the pursuit of firm interests.

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Section: Discussionmentioning

confidence: 99%

Section: Literature Review and Hypothesesmentioning

confidence: 99%