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Governance System Effectiveness Following the Crisis: the case of Korean business group headquarters
Author(s) -
Chang James Jinho,
Shin HyunHan
Publication year - 2006
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/j.1467-8683.2006.00489.x
Subject(s) - chaebol , restructuring , corporate governance , business , financial crisis , government (linguistics) , corporate group , accounting , financial system , capital expenditure , capital market , capital (architecture) , economics , finance , archaeology , linguistics , philosophy , macroeconomics , history
Various corporate governance initiatives were adopted in Korea following a major corporate governance failure, identified as a direct cause of the Asian Financial Crisis of 1997–1998. Our findings indicate that, before the crisis, the likelihood of replacing poorly performing CEOs was not related to business group (chaebol) affiliation. However, after the Asian Financial Crisis, we find CEO turnover sensitivity to performance is greater in chaebol firms than in stand‐alone firms. These findings indicated improved monitoring following reforms initiated by the Korean government, NGOs and other capital market participants. These findings have implications for the effectiveness of corporate governance in US firms following governance restructuring imposed by the SEC, the government and various market participants.