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The Impact of the Ownership Discrepancy Between Cash-Flow Rights and Voting Rights on Firms' Soft Asset Investment Decisions: Evidence from Large Business Groups in South Korea

Title
The Impact of the Ownership Discrepancy Between Cash-Flow Rights and Voting Rights on Firms' Soft Asset Investment Decisions: Evidence from Large Business Groups in South Korea
Author
김유찬
Keywords
Corporate governance; Ownership structure; Shareholders rights; Business group; ASIAN FINANCIAL CRISIS; CORPORATE GOVERNANCE; AGENCY
Issue Date
2015-05
Publisher
SPRINGER
Citation
GROUP DECISION AND NEGOTIATION, v. 24, No. 3, Page. 429-450
Abstract
This study investigates the impact of the ownership discrepancy between cash flow rights and voting rights on firms' soft asset investment decisions in large business groups in South Korea. We find a negative association between the ownership discrepancy and the level of investments in intangibles and human resources. Our finding implies that when controlling #or ultimate# shareholders have higher voting rights than their cash flow rights, they have more incentives to reduce firms' investments that are essential for business success in long-term strategic perspectives, exploiting minority shareholders' rights. In addition, we find that the negative association is more pronounced for firms with a higher level of free cash flows and that the negative association becomes less significant or insignificant in the period after the Internal Accounting Control System Legislation.
URI
https://link.springer.com/article/10.1007/s10726-014-9397-3http://hdl.handle.net/20.500.11754/35487
ISSN
0926-2644; 1572-9907
DOI
10.1007/s10726-014-9397-3
Appears in Collections:
COLLEGE OF BUSINESS AND ECONOMICS[E](경상대학) > BUSINESS ADMINISTRATION(경영학부) > Articles
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