Corporate governance, product-market competition, and stock returns: evidence from the Korean market

Ryu, Dongseok; Ryu, Doojin; Hwang, Joon Ho

doi:10.1057/s41291-017-0014-6

Cited by 34 publications

(19 citation statements)

References 37 publications

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“…Provincial environmental regulation stringency was computed as the total chemical emissions in the province where a firm's headquarter is located, weighted by economic population in the province, and log‐transformed and inverted (Berrone et al, 2010; Wang et al, 2018). Product market competition was measured using the Herfindahl index (HHI), which is the sum of squares of the market shares of all the firms operating in an industry in a given year (Byun et al, 2012; Ryu et al, 2017).…”

Section: Methodsmentioning

confidence: 99%

“…To prevent managerial opportunism of managers, principals (shareholders) devise diverse means, such as pay‐for‐performance and stock options, to integrate their interests with agents' (managers') and develop monitoring mechanism, which can monitor agents (or managers) effectively (Flammer & Luo, 2017; Rubashkina, Galeotti, & Verdolini, 2015; Ryu, Ryu, & Hwang, 2017). Such means may be often ineffective in alleviating type I agency problem in practice (Dess & Beard, 1984; Zhou et al, 2017).…”

Section: Theoretical Background and Hypothesismentioning

confidence: 99%

“…If outside executives do not address appropriately such corporate threats, firms' performance (or profit) will drop significantly. Then they are held accounted for firms' poor performance (Ryu et al, 2017). Outside executives at FC also can view environmental management as an effective strategic differentiation tool, not risky and costly initiatives in a more competitive industry (Luo, Kaul, & Seo, 2018), whereas they regard environmental‐friendly strategies as risky and costly projects in a less competitive market (Dupire & M'Zali, 2018).…”

Section: Theoretical Background and Hypothesismentioning

confidence: 99%

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Doing more and doing better are two different entities: Different patterns of family control and environmental performance

Zeng

Chen

et al. 2020

Bus Strat Env

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Family firms bear two types of agency costs, including type I and type II agency problems, in corporate environmental practices: (1) Outside executives at family firms hesitate to engage in environmental strategies, which can lead to drops in profits; (2) Controlling families employ opportunistically environmental management to achieve their interests. We argue that a primary cause for the agency problems lies on ineffective internal corporate governance at family firms, which can cause loss of managerial (or power) balance between outside executives and family executives. Our findings show that family firms with ownership and strategic control (FSC), which family executives and outside executives monitor and constrain each other, can achieve the highest environmental performance. Moreover, external controls, including product market competition and provincial environmental regulations, substitute effective internal control of FSC. The environmental performance premium of FSC is more prevalent when the production market competition is lower. Family firms with ownership, operational, and strategic control (FOSC) can achieve higher environmental performance within a province with more stringent environmental regulations.

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Section: Methodsmentioning

confidence: 99%

Section: Theoretical Background and Hypothesismentioning

confidence: 99%

Section: Theoretical Background and Hypothesismentioning

confidence: 99%

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Doing more and doing better are two different entities: Different patterns of family control and environmental performance

Zeng

Chen

et al. 2020

Bus Strat Env

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“…As noted above, the chaebol-driven business environment also sets Korea apart from other advanced economies, offering a unique context in which to explore how female participation at the board level affects investment decisions, as relatively less is known about how gender affects corporate decisions in Korea. Better board governance may not always be beneficial to the firm depending on the competition, as Ryu et al (2017) find evidence that adjusted stock returns are lower for Korean firms with better governance when product market competition is intense.…”

Section: Introductionmentioning

confidence: 99%

Female directors on the board and investment efficiency: evidence from Korea

et al. 2019

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We investigate whether female board representation affects investment efficiency at Korean publicly traded companies from 2006 to 2014. We find a positive association between female directorship and investment efficiency. For a subsample of firms that are classified into over-and under-investment groups, we find that the subsample of firms with female directors is less likely to over-invest compared to the group without female directors. This implies that female directors' risk-aversion, conservatism, and prudence affect investment efficiency by reducing over-investment rather than reducing under-investment. Other robustness tests corroborate our conclusion that female directors help to improve investment efficiency.

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“…A prominent example of failure to do this is the Korean conglomerates known as chaebols. Chaebols account for a substantial portion of the capitalization of firms listed on the Korea Exchange (KRX) stock market (Ryu et al 2017) and they are credited with contributing significantly to Korea's speedy economic growth. As corporate social responsibility has gained attention, chaebols have loudly proclaimed that their business missions include creating social value and giving to society.…”

Section: Managerial Implicationsmentioning

confidence: 99%

Interpretation and integration of “creating shared value” in Asia: implications for strategy research and practice

Kim

Saitō²,

Avvari

2020

Asian Bus Manage

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“Creating shared value” (CSV) appears on contemporary business agendas. But despite empirical evidence concerning its popularity, serious questions about the logic of CSV are raised by scholars. This paper focuses on CSV in the Asian context. Using in-depth interviews with key informants from Japan, Korea, and India, we employ a strategy-as-practice approach and develop propositions related to CSV in Asia. We identify three characteristics of Asian business practices that shape CSV in Asia: a survival sense, a strong ethical stance, and business-in-society dynamics. Finally, we introduce a preliminary framework for Asian CSV along with suggestions for future research and practice.

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Corporate governance, product-market competition, and stock returns: evidence from the Korean market

Cited by 34 publications

References 37 publications

Doing more and doing better are two different entities: Different patterns of family control and environmental performance

Doing more and doing better are two different entities: Different patterns of family control and environmental performance

Female directors on the board and investment efficiency: evidence from Korea

Interpretation and integration of “creating shared value” in Asia: implications for strategy research and practice

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