Earticle

초록

영어

A subsidiary of a business group is a legal entity which can raise its own external fund with limited liability while a division of a conglomerate is not. In spite of the difference between business groups and conglomerates, prior studies often focus on conglomerates or do not clearly distinguish them. We directly compare business groups and conglomerates, especially in investment strategies and firm values. Because of the limited liability, a business group is likely to choose a risky project more than a conglomerate and that strategy brings a payoff advantage to a business group when the success probability is high. Our model also considers tunneling of business groups and the portfolio of matching single firms. While the participant of newshareholders and the firm value of a business group decreases with tunneling, when the success probability is low the group value can be higher than the matching single firms.

목차

Abstracts
 I. Introduction
 II. A Formal Model Description
 III. Investment Decisions and Firm Value Comparisons
  III.A. Benchmark Case (k = 0)
  III.B. Tunneling Case (k > 0)
 IV. Discussion
 V. Conclusion
 Reference

키워드

저자

• Sunae Lee [ Graduate School of Management, Korea Advanced Institute of Science and Technology (KAIST) ] Corresponding author
• S. Hun Seog [ Graduate School of Finance, Korea Advanced Institute of Science and Technology (KAIST) ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330