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http://dx.doi.org/10.5762/KAIS.2019.20.5.352

Financial Analysis on Changes in Profitability for Chaebol Firms in the Post-period of the Global Financial Turmoil  

Kim, Hanjoon (Division of Business Administration, Hoseo University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.20, no.5, 2019 , pp. 352-362 More about this Journal
Abstract
The study investigates one of the long-standing, but still controversial issues in modern finance from the international and domestic perspectives. That is, financial components and differences on corporate profitability are identified and compared under the primary hypotheses. Empirical research settings include the sample data as KOSPI-listed chaebol firms, time reference covering the post-era of the global financial turmoil and two differently defined profitability indices measured by the market- and the book-value bases. A majority of total 7 explanatory variables except firm size and leverage ratio reveal their statistically significant power to explain profitability indices for the chaebol firms in the first hypothesis. The results are generally compatible with those obtained from their counterparts of non-chaebol firms. In the second hypothesis applying multinomial logistic model, the chaebol firms are classified into three groups according to the level of profitability. It is then confirmed that variables to represent the market-valued debt ratio, business risk and growth potential are financially discriminating factors among the three groups. The study may provide a new vision to identify financial factors of corporate profitability for Korean chaebol firms after the global financial crisis, which can enhance the benefits of interested parties at the government or corporate level in a virtuous cycle.
Keywords
Corporate Profitability Index; Global Financial Turmoil; Korean Chaebol Firm; Multinomial Logistic Regression Model; Static Panel Data Model;
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