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A Conglomerate's effort for co-prospering with its subcontractors and firm value: Evidence from Korea

Title
A Conglomerate's effort for co-prospering with its subcontractors and firm value: Evidence from Korea
Author
고종권
Keywords
corporate social responsibility; firm value
Issue Date
2018-07
Publisher
MDPI
Citation
SUSTAINABILITY, v. 10, no. 7, Article no. 2512
Abstract
Shared growth effort, which is also known as mutual growth, has emerged as one of the most important keywords in Korean economy. This study examines whether a conglomerate's shared growth effort evaluated by the Shared Growth Commission is valued by market investors. Using our full sample, we find that firms participating in shared growth evaluation have a higher firm value. The results from the full sample show that firm's effort on shared growth is rewarded in the Korean capital market. However, after matching firms by size of sales and return on assets to better control for firm characteristics, we find that neither the participation nor a higher (lower) rating of the shared growth evaluation is associated with firm value. This implies that the result from the full sample may be capturing firm characteristics, instead of the effects of shared growth effort, thus market investors do not consider conglomerate's shared growth effort as a value-enhancing strategy. Using a recently introduced shared-growth index, the findings in our study provide preliminary but important evidence on how creating shared value (CSV) is related to firm value.
URI
https://www.mdpi.com/2071-1050/10/7/2512https://repository.hanyang.ac.kr/handle/20.500.11754/119333
ISSN
2071-1050
DOI
10.3390/su10072512
Appears in Collections:
GRADUATE SCHOOL OF BUSINESS[S](경영전문대학원) > BUSINESS ADMINISTRATION(경영학과) > Articles
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