The Relationship Between Corporate Governance and Foreign Ownership for Korean Firms

김동순,; 엄승섭,

doi:10.21739/ibr.2008.12.12.4.155

Cited by 4 publications

(2 citation statements)

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“…Previous researches have made numerous attempts to identify the influence of foreign investors on firm value, yielding mixed results. Research on the relationship between foreign investors and firm value has suggested that foreign blockholders lead to more efficient management in terms of improving corporate governance (Sachs and Warner, 1995;Khanna and Palepu, 1999;Shin et al, 2004;Ahmadjian and Robbins, 2005;Park and Lee, 2006;Kim and Eum, 2008). The role of foreign investors in the Korean economy, however, has been controversial since several cases of excessive payments of cash dividends and stock repurchases were made at the requests of foreign block investors.…”

Section: Introductionmentioning

confidence: 99%

Foreign board membership and firm value in Korea

Choi

Sul

Min

2012

Management Decision

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PurposeThis paper seeks to explore such questions as: “What are the impacts of foreign investors and what are the channels through which foreign investors contribute to or detracts from firm value in Korea?” It aims to discuss how foreign investors and foreign outside directors interact to enhance firm value.Design/methodology/approachUsing longitudinal data from the KOSPI200 index in Korea during 2004‐2007, the study examined the direct and interaction effect of foreign blockholders and foreign board members. To address the representativeness of foreign investors, the authors verified the mandates of foreign board members though telephone interviews.FindingsForeign block shareholders and foreign outside directors respectively provide expertise and independent monitoring over management. Foreign blockholders' management control via board membership is likely to mitigate leverage of value enhancement when foreign outside directors represent private interests of foreign blockholders. The moderating effect is also supported since foreign ownership concentration has an inverted U‐shaped relationship with value enhancement. The paper confirms that board independence reinforces the positive impact of foreign outside directors on firm value.Research limitations/implicationsThis study offers a key to understanding corporate governance in that mutual monitoring and a balance among various types of stakeholders are crucial to value enhancement.Originality/valueThe paper provides clues to the extant diverse findings concerning the impact of foreign investors on firm value. It applies an integrated perspective to the empirical analyses of the impact of foreign investors by giving consideration to the agency – foreign outside directors – to implement management control on behalf of foreign blockholders.

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Section: Introductionmentioning

confidence: 99%

Foreign board membership and firm value in Korea

Choi

Sul

Min

2012

Management Decision

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“…Additionally, authors such as Kim and Eum (2008) and Shin, Lee, and Chang (2004) report that foreign directors lead to more efficient management in terms of enhancing corporate governance. In this respect, foreign directors use board membership as a channel to monitor the management and can also be considered as independent from large shareholders and the management, because foreign investors are not part of the traditional domestic cronyism that exists through regionalism (Choi, Sul, and Kee Min, 2012).…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

La Composición de los Consejos de Administración de las Empresas Cotizadas Españolas y su Impacto en la Toma de Decisiones Empresariales

Zamora¹

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How foreign and institutional directorship affects corporate dividend policy

Pucheta‐Martínez

López‐Zamora

2016

Investment Analysts Journal

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The Relationship Between Corporate Governance and Foreign Ownership for Korean Firms

Cited by 4 publications

References 0 publications

Foreign board membership and firm value in Korea

Foreign board membership and firm value in Korea

La Composición de los Consejos de Administración de las Empresas Cotizadas Españolas y su Impacto en la Toma de Decisiones Empresariales

How foreign and institutional directorship affects corporate dividend policy

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