Chaebol Firms’ Donation Activities and Firm Values

Hong, Soonwook

doi:10.3390/su11082417

Cited by 6 publications

(4 citation statements)

References 26 publications

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“…It is necessary to conduct research independently from other markets, such as the United States and Europe, since the chaebol are very unique business structures, existing only in the Korean financial market. There are several studies showing that the existence of chaebols affects the empirical results of corporate finance studies [31][32][33][34][35][36][37][38]. In particular, Campbell and Keys [31] point out the fact that Gibson's [39] study, which analyzes the relationship between the corporate performance and top executive turnover in emerging markets, includes South Korea in his sample, without considering chaebols.…”

Section: Introductionmentioning

confidence: 99%

Which Corporate Social Responsibility Performance Affects the Cost of Equity? Evidence from Korea

Kim

2019

Sustainability

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This study analyzes the effect of corporate social responsibility activities on the cost of equity in Korea. We find that firms with better corporate social responsibility (CSR) performance generally exhibit cheaper equity financing. Considering three dimensions of CSR separately, we find that a higher “socially responsible management” significantly reduces the cost of equity by 1.13%-1.37% per annum and “Corporate governance” activity also marginally affects the cost of equity, while “environmental management” has no impact. Our result is robust in controlling for systematic risk, size, leverage ratio, and the number of analysts. These results imply that enhancing socially responsible management and corporate governance can increase firm value in Korea, but environmental management is not relevant for firm values. Putting differently, investors tolerate a lower return from firms with more CSR activities, because they expect them to provide sustainable incomes. Future researches can extend our approach to examining the effect on the cost of debt and cost of capital.

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Section: Introductionmentioning

confidence: 99%

Which Corporate Social Responsibility Performance Affects the Cost of Equity? Evidence from Korea

Kim

2019

Sustainability

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“…It is still worth highlighting a relationship between oligopolies and Korean higher education. In South Korea, there are large conglomerates of companies that form oligopolies or large monopolies, called chaebol(CHOI, H.; CHO, 2021;CHOI, M.;HONG, 2022;HONG, 2019). The chaebol represent a substantial part of the country's social and developmental intervention, being present in all areas of South Korea's actions, however, also in education.…”

Section: On the Other Side Of The World: The Commodification And Glob...mentioning

confidence: 99%

The Implications of the Commercialization Process of Private Universities in Brazil in Relation to the Expansion of South Korean Private Higher Education

Ferreira

2023

JASCS

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This article discusses the differences in the process of commercialization of higher education between Brazil and South Korea, with emphasis on the creation of private higher education in both countries and the differences in the quality of teaching and labor supply in the market. This analysis is used to understand the expansion dynamics of an emerging country (Brazil) and a country considered to have one of the best education systems in the world. The discussions presented show that South Korea has a higher proportion of its population with higher education and lower unemployment rates compared to Brazil, especially for those with higher education. These differences can be attributed in part to the successful implementation of government policies to promote education and workforce training in South Korea.

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“…Hong (2019) [9] documents that charitable donations from Chaebol firms have the propensity to decrease shareholder value, while donation activities enhance shareholder value in general, implying that the corporate philanthropic practices of Chaebol firms have plenty of room for improvement.…”

Section: Backgrounds and Hypotheses Developmentsmentioning

confidence: 99%

“…For example, companies perform causerelated marketing, which refers to a marketing tool that promotes product purchasing that leads to target-oriented donations. Considering that corporate donations toward environmental protection have been remarkably increasing [18,19] and market participants are more likely to value the generous giver [9], environmentally poor performers and givers would engage in greenwashing to meet the social and market demands.…”

Section: Backgrounds and Hypotheses Developmentsmentioning

confidence: 99%

Another Form of Greenwashing: The Effects of Chaebol Firms’ Corporate Governance Performance on the Donations

Choi¹,

Hong

2022

Sustainability

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Environmental, social, and governance (ESG) metrics are widely used to measure the firms’ social performance. In this regard, donation expenses are one of the outcomes for the firms’ effort to build, grow, and maintain the social value. However, firms may expense a trivial or minimum amount of donations, considering the corporate size, in order to disguise themselves as a “good company”. In this paper, exploiting 2010–2019 Korean Stock Exchange (KSE) market listed companies’ financials and ESG scores, we examine whether Chaebol firms with good governance “actually” spend more donation expenses. We predict and find that good governance does not actually lead to greater donation expenses among Chaebol firms, despite the positive relations between governance and donation expenses in general. Overall, our findings highlight that good Chaebol companies determined by ESG metrics may not be real charitable companies. Our findings provide counterevidence against the notion that firms with a higher ESG score are more likely to be charitable.

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Chaebol Firms’ Donation Activities and Firm Values

Cited by 6 publications

References 26 publications

Which Corporate Social Responsibility Performance Affects the Cost of Equity? Evidence from Korea

Which Corporate Social Responsibility Performance Affects the Cost of Equity? Evidence from Korea

The Implications of the Commercialization Process of Private Universities in Brazil in Relation to the Expansion of South Korean Private Higher Education

Another Form of Greenwashing: The Effects of Chaebol Firms’ Corporate Governance Performance on the Donations

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