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Identifier to cite or link to this item: https://hdl.handle.net/10086/13483

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Title
Determinants of Family Ownership: The Choice between Control and Performance
Creator
Creator Name
Jang, Hasung Jang, Hasung
Affiliation
Affiliation Name
Korea University Business School
Creator Name
Kang, Hyung-cheol Kang, Hyung-cheol
Affiliation
Affiliation Name
Korea University Business School
Creator Name
Park, Kyung Suh Park, Kyung Suh
Affiliation
Affiliation Name
Korea University Business School
Editor
Contributor Name
Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University
Abstract
This paper analyzes what determines ownership structure of family firms in Korea. Our analysis shows that control is as important a factor as performance in the determination of whether a family in Korea chooses to own a firm. The controlling family prefers to own shares of de facto holding companies because they provide control over affiliated companies and firms that perform well. The family, however, allows its affiliated companies to own more shares of firms that perform poorly and of firms that do not provide the family with power to control the firm. In addition, controlling families own fewer shares of firms that make bond investments in affiliated companies because bond holding does not provide control. We carry out logit regressions for firms without family ownership and for firms with a positive family ownership. The family chooses not to own shares regardless of a firm's performance if the firm does not provide significant control over affiliated companies. We also show that the family values its control more for closely held firms.
Description
Revision in April 2005
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2005-10
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
CEI Working Paper Series ; No. 2005-5
Relation
Related Identifier
URI
  http://cei.ier.hit-u.ac.jp/index.html
NCID
AA11590659
Number of Pages
50
Appears in Collections
CEI Working Paper Series
URL
https://hdl.handle.net/10086/13483