Ownership Structure, Intensive Board Monitoring, and Firm Value: Evidence from Korea

This article measures proxies for intensive board monitoring using Korean corporate governance data. We find that intensive board monitoring has a positive effect on firm value in Korea. We also explore the relationship between controlling shareholders' ownership and intensive board monitoring...

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Bibliographic Details
Published in:Asia-Pacific journal of financial studies 2013, 42(2), , pp.191-227
Main Authors: Byun, Hee Sub, Lee, Ji Hye, Park, Kyung Suh
Format: Article
Language:English
Subjects:
Boards of directors
Business valuation
Control
Controlling shareholders
Corporate governance
Emerging markets
Firm value
Monitoring committee
Outside directors
Shareholders rights
Stockholders
Studies
경영학
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Summary:This article measures proxies for intensive board monitoring using Korean corporate governance data. We find that intensive board monitoring has a positive effect on firm value in Korea. We also explore the relationship between controlling shareholders' ownership and intensive board monitoring efficiency. We confirm that direct ownership by controlling shareholders moderates the relationship between intensive board monitoring and firm value. For firms with greater disparity between controlling shareholders' control rights and cash flow rights, the effect of intensive board monitoring on firm value decreases. These results suggest that the interplay among various internal control mechanisms affects corporate governance efficiency.
ISSN:2041-9945
2041-6156
DOI:10.1111/ajfs.12012