Governance System Effectiveness Following the Crisis: The Case of Korean Business Group Headquarters

13 Pages Posted: 8 May 2006

See all articles by James Jinho Chang

James Jinho Chang

Yonsei University - School of Business

Hyun-Han Shin

Yonsei University

Abstract

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.

Suggested Citation

Chang, James Jinho and Shin, Hyun-Han, Governance System Effectiveness Following the Crisis: The Case of Korean Business Group Headquarters. Corporate Governance: An International Review, Vol. 14, No. 2, pp. 85-97, March 2006, Available at SSRN: https://ssrn.com/abstract=888859 or http://dx.doi.org/10.1111/j.1467-8683.2006.00489.x

James Jinho Chang

Yonsei University - School of Business ( email )

Yonsei University
Seoul
Korea

Hyun-Han Shin (Contact Author)

Yonsei University ( email )

50 Yonsei Ro
Seodaemoon Gu
Seoul
Korea, Republic of (South Korea)
82-2-21235466 (Phone)

HOME PAGE: http://https://ysb.yonsei.ac.kr/faculty.asp?mid=n02&sOpt=&uid=32

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