The structure and formation of business groups: Evidence from Korean chaebols |
| |
Authors: | Heitor Almeida Sang Yong Park Marti G Subrahmanyam Daniel Wolfenzon |
| |
Institution: | 1. University of Illinois, Urbana-Champaign, United States;2. Yonsei University, South Korea;3. New York University, United States;4. Columbia University, United States |
| |
Abstract: | We study the evolution of Korean chaebols (business groups) using ownership data. Chaebols grow vertically (as pyramids) when the controlling family uses well-established group firms (“central firms”) to acquire firms with low pledgeable income and high acquisition premiums. Chaebols grow horizontally (through direct ownership) when the family acquires firms with high pledgeable income and low acquisition premiums. Central firms trade at a relative discount, due to shareholders’ anticipation of value-destroying acquisitions. Our evidence is consistent with the selection of firms into different positions in the chaebol and ascribes the underperformance of pyramidal firms to a selection effect rather than tunneling. |
| |
Keywords: | Business groups Family firms Pyramids Cross-shareholdings Tunneling Mergers and acquisitions |
本文献已被 ScienceDirect 等数据库收录! |