The Korean Journal of Economic Studies
Does Holding Company System Affect the Corporate Governance and Related Party Transactions?
Joohyeon Kim (Korea Fair Trade Commission) and Sangin Park (Seoul National University)Year 2021Vol. 69No. 2
Using propensity score matching and a difference-in-differences method, we empirically find that the conversion to the holding company system has improved the corporate governance of chaebol firms but raised its related party transactions. The results suggest that chaebol controlling family’s tunneling using related party transactions may be exacerbated despite apparent improvements of corporate governance scores of individual firms after the conversion to the holding company system.