The costs (and benefits?) of diversified business groups: The case of Korean chaebols

By Stephen P. Ferris, Kenneth A. Kim, Pattanaporn Kitsabunnarat. 2003

251 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/dbc5bbf3f812288afc6ce475a4abf6a47404f092

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

Citations in the corpus

Business group affiliation, ownership structure, and the cost of debt (2013, background): “With respect to debt financing, a particularly important feature of business groups is that they enablemember firms to share risks by smoothing out income flows and reallocating resources (Ferris et al., 2003; Khanna and Yafeh, 2005, 2007).”
Family ownership and R&D investment: The role of growth opportunities and business group membership (2015, background): “Thus, business groups often engage in cross-subsidization to help unprofitable affiliates (Bae, Kang, & Kim, 2002; Ferris et al., 2003; George & Kabir, 2008; Whited, 2001) by, for example, providing loans or loan guarantees, through equity investment, and through internal transactions (Estrin, Poukl”
Business groups in developing capital markets: Towards a complementarity perspective (2015, background): “BGs also serve to reduce bankruptcy and survival risks of weaker affiliates (Chacar and Vissa, 2005; Ferris, Kim, and Kitsabunnarat, 2003), but may do so at a cost to stronger members through cross-subsidization.”
Corporate Governance, Corporate Ownership, and the Role of Institutional Investors: A Global Perspective (2003, unknown): “See, for example, Campbell and Keys (2002) and Ferris, Kim, and Kitsabunnarat (2003) for a discussion of the chaebol in South Korea and Khanna (2000) for a discussion of business groups more generally.”
Are emerging economies less efficient? Performance persistence and the impact of business group affiliation (2005, background): “Ferris, Kim, and Kitsabunnarat (2003) also report that chaebol-affiliated firms suffer a value loss relative to non-affiliated firms, even after controlling for the relatedness of diversification within the chaebol.”
From diversification premium to diversification discount during institutional transitions (2008, methodology): “…þ error term (3) This cross-level specification is driven by the conceptual need to focus on the firm level per the ''chop shop'' method—the total value of any group (conglomerate) is inferred by the aggregate value of its constituent units (affiliate firms in this case) (see Ferris et al., 2003).”
Foreign investors and corporate governance in Korea (2010, background): “Foreign investors and corporate governance Grossman and Hart (1998) claims that concentrated ownership helps solve the managerial agency problem proposed originally by Jensen and Meckling (1976), because controlling shareholders have the power and incentive to discipline management.”
Business Groups in Emerging Markets: Paragons or Parasites? (2007, methodology): “Ferris et al. (2003), who use stock market data, find that chaebol-affiliated firms currently trade at a discount and suggest that this may be due to low profits, over-investment, or inefficient cross-subsidization within the groups.”
Corporate Governance in Emerging Economies: A Review of the Principal-Principal Perspective (2008, background): “While there are benefits to business groups, they can have certain disadvantages: they tend to be large cumbersome organizations that carry coordination and administration costs (Bae et al., 2002; Claessens et al., 2002; Ferris et al., 2003; Joh, 2003).”