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http://dx.doi.org/10.15207/JKCS.2021.12.8.207

The effect of concurrent positions of board members on corporate diversification  

Park, Yoo-Gak (Dept. of Business Administration, Pusan National University)
Kim, Dong-Il (Dept. of Business Administration, Pusan National University)
Publication Information
Journal of the Korea Convergence Society / v.12, no.8, 2021 , pp. 207-214 More about this Journal
Abstract
Existing studies have shown consistent results that a diversification discount phenomenon occurs, which means that the value of the company decreases as the degree of diversification of a company increases. Nevertheless, it is explained by the agency theory as a factor that continues to promote diversification by companies. And in order to solve the agency problem, it is important to form an effective governance structure. In order to solve these problems, this study aims to study how the directors' concurrent information affects the monitoring effect of the board of directors through this affects diversification.To this end, research was conducted on KOSPI companies for 6 years from 2011 to 2016.As a result of the analysis, in the case of the concurrent appointment of the CEO and the inside director, there was a positive (+) effect, but the significance could not be confirmed. In the case of adjunct appointments as outside directors, positive results were confirmed that were significant for diversification.
Keywords
Board member; Inside director; Outside director; Adjunct; Diversification; Diversification discount;
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