The authors show that there is a negative relationship between economic policy uncertainty (EPU) and firm overinvestment using Korean data from 2007 to 2016. Since Jensen (1986) shows that a firm's free cash flow is an important factor of overinvestment, the authors examine how free cash flow...

This paper examines whether the investment of Korean business group ("chaebol") affiliated firms behaved differently from that of non-chaebol firms in response to the COVID-19 outbreak. I show that chaebol firms cut back investment to a lesser degree than similar non-chaebol firms. Chaebol firms...

Unlike conglomerates in the U.S., where investment flows may be distorted due to power struggles (Rajan, Servaes, and Zingales (2000)), we find that diversified business groups in India, on average, invest efficiently. Our analysis controls for the possibility of tunneling (Bertrand, Mehta, and...