In this research, we investigate whether chaebol affiliations have a different financial policy compared with non-chaebol firms, in debt level, cash-holding level, and investment decision policy. Our results indicate that 8 variables out of 10 show significant differences in terms of the...

This paper argues that groups reduce bankruptcy costs with respect not only to stand-alone units (thanks to coinsurance) but to conglomerates as well (thanks to corporate limited liability). This allows groups to save on contagion costs, thereby generating more value than conglomerates despite a...

This paper studies how tax shields of loss-making entities affect resource allocation within business groups. Evidence from a large international sample and a single-country regression discontinuity design suggests that groups avoid their member firms' defaults when tax shields from...

We find that ownership changes much less over time in private firms than in public firms. The average largest shareholder in private (public) Norwegian firms keeps the same stake in 82% (14%) of two consecutive years. In private firms past ownership dominates ownership determinants proposed in...

In this paper, we attempt to understand whether business group affiliation continues to create value with improvements in institutional environment, especially with increased product market competition. This question comes at a time when there is growing awareness that business groups dominate...

The capital structure of firms that face restrictions on liquidity (i.e. that cannot hedge continuously) is affected by the agency costs and moral-hazard implicit in the contracts they establish with stockholders and customers. It is demonstrated in this paper that then an optimal level of...