Earticle

초록

영어

This paper provides new evidence on the relationship between internal capital markets and corporate investment by exploiting an exogenous event and an unique empirical setting. Specifically, we compare the changes in investment of Korean business group (e.g., chaebol) firms with non-chaebol Korean firms in the aftermath of the 1997 Asian financial crisis. Korean chaebol provide a unique setting for the study of internal capital markets, since they comprise a large number of legally independent firms in several different industries, which are ultimately controlled by a family owner. Our empirical methodology employs a difference-in-differences matching estimator to ensure that chaebol firms (those in the treated group) and non-chaebol firms (those in the control group) are as similar as possible in all observable dimensions other than chaebol membership. The results shown that chaebol firms invest significantly more than non-chaebol firms in the aftermath of the crisis. This difference in investment behavior is specific to the Asian crisis period and does not hold for other, normal periods. In addition, we show that chaebol firm post-crisis investment is positively associated with variables that proxy for the availability of internal capital markets, including industry diversification within a chaebol and chaebol liquidity. The greater post-crisis investment of cheabol firms is not associated with postcrisis declines in profitability. Overall, our results suggest that Korean Chaebol were able to use their internal capital markets to mitigate the negative effects of the Asian crisis on corporate investment.

목차

Abstract
 I. Introduction
 II. Existing Literature
 III. Empirical Strategy
  1. Matching estimators
  2. The 1997 Asian Financial Crisis
  3. Data and Variables
 IV. Empirical Results
  1. Descriptive Statistics
  2. The Effects of the 1997 Currency Crisis
  3. Do Internal Capital Markets Explain the Lower Decline in Invesmtents for Chaebol Firms?
  4. Evidence on Post-Crisis Profitability
  5. Robustness
 VI. Concluding Remarks
 References
 Table
 Figure

저자

• Chang-Soo Kim [ School of Business, Yonsei University-Wonju ]
• Heitor Almeida [ Department of Finance, University of Illinois-Urbana/Champaign ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330