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Interlocking Ownership in the Korean Chaebol
Author(s) -
Kim DongWoon
Publication year - 2003
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/1467-8683.00014
Subject(s) - chaebol , subsidiary , business , shareholder , interlocking , control (management) , business administration , market economy , industrial organization , corporate governance , management , multinational corporation , finance , economics , engineering , mechanical engineering
This paper analyses how a dominant entrepreneur of the Korean chaebol is able to exercise control, despite having a tiny shareholding, through strategic interlocking ownership. The entrepreneur organises his intimate group, consisting of three clusters of in‐house shareholders, and they together have controlling interests in only a few subsidiaries, mainly public companies. These central subsidiaries, as quasi‐holding companies, control most other member companies. The resultant ownership structure resembles a grid, in which individual subsidiaries’ ownership structures are intermingled.