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

See all articles by Kee-Hong Bae

Kee-Hong Bae

York University - Schulich School of Business

Seung-Bo Kim

Korea Research Institute for Vocational Education and Training

Woochan Kim

Korea University Business School; European Corporate Governance Institute (ECGI); Asian Institute of Corporate Governance (AICG)

Date Written: January 2011

Abstract

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

Bae, Kee-Hong and Kim, Seung-Bo and Kim, Woochan, Family Control and Expropriation of Not-for-Profit Organizations: Evidence from Korean Private Universities (January 2011). KDI School of Public Policy & Management Paper No. 06-01. Available at SSRN: https://ssrn.com/abstract=950192 or http://dx.doi.org/10.2139/ssrn.950192

Kee-Hong Bae (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-2100 ext) 20248 (Phone)
416-736-5687 (Fax)

Seung-Bo Kim

Korea Research Institute for Vocational Education and Training ( email )

15-1, Chongdam 2-dong, Kangnam-gu
Seoul 135-949
Korea, Republic of (South Korea)
82-2-3485-5097 (Phone)
82-2-3485-5048 (Fax)

HOME PAGE: http://www.krivet.re.kr/

Woochan Kim

Korea University Business School ( email )

LG-POSCO Bldg #524
Anam-Dong, Seongbuk-Ku
Seoul, Seoul 136701
+822-3290-2816 (Phone)
+822-922-7220 (Fax)

HOME PAGE: http://biz.korea.ac.kr/professor/wckim

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Asian Institute of Corporate Governance (AICG) ( email )

1, 5-ga, Anam-dong
Sungbuk-gu
Seoul, 136-701
Korea, Republic of (South Korea)

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