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...

- The allocative efficiency in Korea is on a rapid downturn. - Based on Statistics Korea's Survey of Business Activities, an analysis was conducted on firms with over 50 regular employees and 300 million won in equity during 2006-2015 to find that allocative efficiency has continued to decline...

Using unique detailed data, we describe the role of internal capital markets in Italian business groups before and after the financial crisis, an exogenous event which provides an ideal setting to assess whether the working of internal capital markets helps group-affiliated firms to mitigate...

This paper investigates whether corporate philanthropic decisions are associated with a firm's listing status and business group affiliation. Analyzing a large sample of public and private firms in Korea, we find that (1) public firms make more charitable contributions than private firms and (2)...

This paper examines capital reallocation among firms in Korean business groups (chaebol) in the aftermath of the 1997 Asian financial crisis, and the consequences of this capital reallocation for investment and performance of chaebol firms. We show that chaebol transferred cash from low growth...

This study attempts a statistical examination and analysis of the characteristics and situation surrounding business groups (Chaebol) in Korea in order to provide basic information for corporation policy and the ongoing business group debate. Business groups have continued to account for an...

We develop a simple model of investment in business groups subject to moral hazard. Our model suggests that productivity and pledgeable income are the drivers of resources in the internal capital markets of these groups. This prediction can be use to explain on the grounds of efficiency some...