• Korean journal of communication and information
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• v.45
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• pp.296-340
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• 2009

The power of media has always been problematic in the countries of full press freedom. Originally, the media used to be an effective vehicle for communication within human beings. However, it exerts an overwhelming power toward human society. Through applying the well-known four dog models in terms of media function, this study attempts to examine how the press media in South Korea transformed themselves into another powerful independent organization or institution after regime shift in 1987. The whole editorials of four sampled newspapers were analyzed through frame analysis model. The ChosunIlbo, known as a conservative and pro-government paper, shows to take the role of supporting chaebol policies under Roh TaeWoo Administration. However, it criticizing sharply against the chaebol policies of Roh MooHyun Administration. The JoongangIlbo, known as a pro-chaebol paper, appears anti-government position through the entire four administrations in terms of chaebol policies. Particularly, it reveals hostile editorial coverage during the Roh MooHyun Administration. However, KyunghyangShinmun, currently known as a liberal paper, viewed somewhat complicated positions (see text in more detail) because of its ownership turbulence during the past twenty years. On the other hand, Hangyoreh, regarded as a progressive paper, keeps in supportive attitude consistently against the four sampled administrations as far as regulating each government policies for chaebols.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.12 no.2
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• pp.699-711
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• 2011

This study is to perform several major analyses to find any differences in the leverage between the pre- and post-period of the currency crisis. Moreover, another aspect is to investigate a financial aspect which has received relatively little attention to the firms and/or industries in the emerging capital markets in comparison to those in the advanced markets. The purpose of this empirical study is to confirm whether or not, it is myth or reality that Korean business conglomerate, chaebol, firms with subsidized financing from government-owned domestic financial institutions in the pre-financial turmoil, may still maintain their higher leverage, even after the crisis. It was found that firms belonging to the chaebol in Korea maintained higher average book-value and market-value based debt ratios, relative to their counterparts not belonging to the chaebol across all of the tested models. There were positive relationships of IND3(=the chemical industry) and Ind5(=the construction industry) to the book-value leverage. This study identified that there were no differences in the explanatory variables included, between the tested models (that is, without and with including the present value of an operating lease) related to each debt ratio. Since the Korean government continue to improve the corporate governance of the domestic firms in terms of accounting transparency and corporate ownership, it would be more efficient, if utilizing this "new" ratio considering an operating lease as an effective measurement of the level of leverage. In terms of the capital structure, it may also be possible for foreign firms to utilize and benefit from the results obtained in this study when operating their new businesses in Korea, given the economic circumstances such as the ongoing progress of the Korea-America FTA or the Korea-China FTA.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.16 no.6
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• pp.3870-3881
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• 2015

This study examined one of the contemporary issues on debate to identify any significant financial determinants on the cash holdings of the cheabol firms in the Korean domestic capital markets. Several important findings on the financial characteristics affecting the cash holdings were evidenced by utilizing various methodologies for statistical estimations. Financial or managerial implications with discussion were provided for the pronounced factors such as CASHFLOW, MVBV, REINVEST, and AGENCY. Assuming that the chaebol firms were overall subject to the financial constrains, they may increase or stockpile cash reserves as internal capital for future investment opportunities or repayment of existing debt, rather than external financing burdened by a high cost of capital. Given the on-going controversy on the optimal level of corporate cash holdings coupled with any foreseeable capital transfer among the associated nations through the investment vehicles such the FTAs (Free Trade Agreements) or TPP (Trans-Pacific Pacts), any empirical findings of the study may shed new light on identifying financial determinants which may significantly affect the level of cash holdings for the business conglomerates, the 'chaebol' firms, in the Korean capital markets.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.1
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• pp.21-31
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• 2019

This paper examines how corporate social responsibility is related to the degree of asymmetric information in the Korean financial market. Recent theory argues that there is a negative relationship between a firm's corporate social responsibility and its information asymmetry. To test this hypothesis, we use the environment, social and governance (ESG) score, published by the Korean Corporate Governance Service, to proxy a firm's management practices toward socially responsible activities. In the entire sample of the Korean firms, we find contrasting results; the ESG score shows negative relationships with the price impact measure but statistically insignificant relationships with the dispersion of analyst forecasts. However, the ESG score shows negative relationships with both measures when we exclude chaebol affiliates from the sample. These findings are robust when we examine environmental, social and corporate governance scores separately. This set of results argues for the extant theory, expecting a negative relationship between a firm's engagement in corporate social responsibility and asymmetric information. It further argues for the importance of firm characteristics in determining the influence of socially responsible activities.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.7
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• pp.185-196
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• 2022

The purpose of this study is to examine the effects of split ratings on earnings management through cost adjustments based on asymmetric cost behaviors. Using a sample of 2,027 Korean firm-year observations over the 2002-2019 period, we analyze whether a firm deliberately reduces discretionary costs, such as selling, general, and administrative (SG&A) expenses, to improve profits when it receives multiple ratings from credit rating agencies (CRAs). While examining earnings management incentives in the presence of split ratings, we also investigate the moderating effects of Chaebols, Korea's unique corporate governance structure. We find that split-rating firms show less stickiness in SG&A costs compared to non-split-rating firms when sales decrease. This result implies the deliberate reduction of discretionary costs to improve earnings in the presence of split ratings, which are more likely to change in future credit assessments. We also find that the incentives for earnings management of split-rating firms are limited in Chaebol firms, which have high levels of socio-economic surveillance and support affiliated firms through the internal market of corporate groups. This study contributes to existing research by identifying new determinants of cost behavior by using the framework of asymmetric cost behavior in relation to earnings management incentives.

• Economic Analysis
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• v.17 no.2
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• pp.56-89
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• 2011

The sensitivity of investment with respect to cash flow is positive in imperfect financial markets. Using a switching regression model, cash flow sensitivity of investments in chaebol firms and large firms appears to be higher. Also, investments are found to be more responsive to cash flow during monetary contraction periods. These findings imply that monetary policy works through a credit channel. Furthermore, it appears that monetary policy exerts distributional effects as well as aggregate effects on that firms are unevenly affected by monetary changes.

• Proceedings of the Technology Innovation Conference
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• 1996.12a
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• pp.265-295
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• 1996

This paper investigates empirically the relationship between various business portfolio properties (particularly technological properties) and chaebol′s performance using data on the 50 largest chaebols in Korea. In addition to the traditional indexes to measure diversification such as entropy index we calculated inter-industry technological similarity using R&D expenditure data by industry and 1990 Input-output Table in Korea, and obtained chaebol-level technological relatedness and internal transaction proportion from chaebols′business profile, inter-industry technological similarity and 1990 input-output table. We applied factor analysis on 13 business portfolio property indexes and showed that they could be grouped into 3 dimensions, diversification scope, inter-business relatedness and degree of vertical integration. In this paper, using 50 largest chaebols′financial data (1989-1994), we analyzed empirically the effect of business portfolio properties on ROS (Return On Sales) which is conventional index for firm performance and on TFP(Total Factor Productivity) growth which is a pure measure of firm performance. To utilize the advantage of panel data, FEM(Fixed Effect Model) and REM(Random Effect Model) were used. The empirical result shows that the entropy index as a measurement of inter-business relatedness is not significant but technological relatedness index is significant. OLS estimates on pooled data were considerably different from FEM or REM estimates on panel data. By introducing interaction effect among the three variables for business portfolio properties, we obtained three findings. First, only VI (Vertical integration) has a significant positive correlation with ROS. Second, when using TFP growth as an dependent variable, both TR(Technological Relatedness) and f[ are significant and positively related to the deepened variable. Third, the interaction term between TR and VI is significant and negatively affects TFP growth, meaning that TR and VI are substitutes. These results suggest strategic directions on restructuring business portfolio. As VI is increased, chaebols will get more profit. A higher level of either TR or W will increase TFP growth rate. but increase in both TR and VI will have a negative effect on TFP growth. To summarize, certain business portfolio properties such as VI and TR can be considered "resources" themselves since they can affect profit rate and productivity growth. VI and TR have a synergy effect of change in profit rate and productivity growth. VI increases ROS and productivity growth, while TR increases productivity growth representing a technological synergy effect.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.20 no.4
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• pp.232-241
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• 2019

This study examines one of the conventional and controversial issues in modern finance. Specifically, this study identifies financial determinants of corporate R&D intensity for firms belonging to Korean Chaebols. Empirical estimation procedures are applied to derive more robust results of each hypothesis test. Static panel data, Tobit regression and stepwise regression models are employed to obtain significant financial factors of R&D expenditures, while logit, probit and complementary log-log regression models are used to detect financial differences between Chaebol firms and their counterparts not classified as Chaebols. Study results found the level of R&D intensity in the prior fiscal year, market-value based leverage ratio and firm size empirically showed their significance to account for corporate R&D intensity in the first hypothesis test, whereas the majority of explanatory variables had important power on a relative basis. Assuming that the current circumstances in the domestic capital market may necessitate gradual changes of Korean Chaebols in terms of their socio-economic function, the results of this study are expected to contribute to identifying financial antecedents that can be beneficial to attain optimal level of corporate R&D expenditures for Chaebol firms on a virtuous cycle.

• Journal of the Korean Regional Science Association
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• v.9 no.1
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• pp.79-99
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• 1993

This paper identifies the mechanisms governing the industrial location changes in Korea by focusing upon the emergence of the country's large conglomerate business organizations (chaebols). As the country has distinctive industrial organization, production systems, and government-business relations, this study tries to develop an ideal conceptual framework for the analysis of industrial location changes in Korea. It perceives the Korean economy as a system within which 'space-organizing', lage business organizations interact over time with government, smaller firms and multinational corporations at different geographical scales. The usefulness of the model is assessed using a case study of Korea's most representative chaebol, the Samsung Group. This study identifies chaebols as the dominant institutions in Korean society. Their growth and business strategies have been influenced by the Korean Government through its power to allocate capital resources. Regional dynamics of industry and labor, therfore, have been strongly influenced by changes in the location, industrial structure, and production system of chaebols. With econmic power concentrated within a few giant business groups and their major areas of operation restricted, unbalanced regional development has resulted. Dissatisfaction from residents in less-developed areas has pressured the Government to advise chaebols to disperse their production facilities. Most small and medium-sized firms are closely linked to large corporations through subcontracting. By forming hierarchical subcontracting. By forming hierarchical subcontracting systems, chaebols have indirectly exploited scattered, part-time, home-based, female and lower-paid laborers organized by subcontractors. Further, chaebols have expanded their business arena to encompass overseas locations in a bid to overcome the problem of a small domestic market, trade regulations and increased market, trade regulations and increased labor costs. Through their international business networks Korea's local and regional economies are integrated into the world economy. Indeed, the identification of the changing relationships of chaebols with both the Korean Government and smaller firms is the key to explaining the nations's spatial dyanmics of industry and labor.

• Journal of Technology Innovation
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• v.5 no.1
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• pp.15-43
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• 1997

This paper investigates empirically the relationship between various business portfolio properties (particularly technological properties) and chaebol's performance using data on the 50largest chaebols in Korea. In addition to the traditional indexes to measure diversification such as entropy index, we calculated inter-industry technological similarity using R'||'&'||'D expenditure data by industry and 1990 Input-output Table in korea, and obtained chaebol-level technological relatedness and internal transaction proportion from chaebols' business profile, inter-inustry technological similarity and 1990 input-output table. We applied factor analysis on 13 business portfolio property indexes and showed that they could be grouped into 3 dimensions. diversification scope, inter-business relatedness and degree of vertical integration. In this paper, using 50 largest chaebols' financial data (1989-1994), we analyzed empirically the effect of business portfolio properties on ROS(Return On Sales) which is conventional index for firm performance and on TFP(Total Factor Productivity) growth which is a pure measure of firm performance. To utilize the advantage of panel data, FEM(Fixed Effect Model) and REM(Random Effect Model) were used. The empirical result shows that the entropy index as a measurement of inter-business relatedness in not significant but technological relatedness index is significant. OLS estimates on pooled data were considerably different from FEM or REM estimates on panel data. By introducing interaction effect among the three variables for business portfolio properties, we obtained three findings. First, only VI(Vertical integration) has a significant positive correlation with ROS. Second, when using TFP growth as an dependent variable, both TR(Technological Relatedness) and VI are significant and positively related to the dependent variable. Third, the interaction term between TR and VI is significant and negatively affects TFP growth, meaning that TR and VI are substitutes. These results suggest strategic directions on restructuring business portfolio. As VI is increased, chaebols will get more profit. A higher level of either TR or VI will increase TFP growth rate, but increase in both TR and VI will have a negative effect on TFP growth. To summarize, certain business portfolio properties such as VI and TR can be considered "resources" themselves since they can affect profit rate and productivity growth. VI and TR have a synergy effect of change in profit rate and productivity growth. VI increases ROS and productivity growth, while TR increases productivity growth representing a technological synergy effect.t.