Family Control and Expropriation of Not-for-Profit Organizations: Evidence from Korean Private Universities
47 Pages Posted: 7 Dec 2006 Last revised: 27 Jan 2011
Date Written: January 2011
We examine the agency problems of not-for-profit organization, university, with a special focus on the conflict between the controlling family and other stakeholders including outside donors, students, and faculty. Using a sample of Korean private universities, we find that measures of family commitment (proxy for good governance) are positively related to the university performance, while measures of family control (proxy for bad governance) are negatively related. We also find that poorly governed universities are more likely to undergo a dispute between the controlling family and other stakeholders. Finally, we show that our results are not driven by the reverse causality that better performance leads to better university governance.
Keywords: Nonprofit, Governance, Expropriation, Donation, Private University
JEL Classification: G30, I22, L31
Suggested Citation: Suggested Citation