Sign in to use this feature.

Years

Between: -

Subjects

remove_circle_outline
remove_circle_outline
remove_circle_outline

Journals

Article Types

Countries / Regions

Search Results (2)

Search Parameters:
Keywords = control–ownership wedge

Order results
Result details
Results per page
Select all
Export citation of selected articles as:
14 pages, 236 KiB  
Article
The Effects of Divergence between Cash Flow and Voting Rights on the Relevance of Fair Disclosure and Credit Ratings
by Jin-Ha Park, Jiyeon Lee and Youn-Sik Choi
Sustainability 2019, 11(13), 3657; https://doi.org/10.3390/su11133657 - 3 Jul 2019
Cited by 2 | Viewed by 2749
Abstract
This study investigates the effects of governance structure on the relationship between disclosure quality and credit ratings. Firms with greater control-ownership divergence are more likely to pursue their private interests because controlling shareholders obtain the benefit of managerial decision in accordance with controlling [...] Read more.
This study investigates the effects of governance structure on the relationship between disclosure quality and credit ratings. Firms with greater control-ownership divergence are more likely to pursue their private interests because controlling shareholders obtain the benefit of managerial decision in accordance with controlling interest and they bear the related risk only to the shareholding value. The greater divergence decreases the level of disclosure, thereby increasing the information asymmetry and agency problems, and, ultimately may be harmful to the firms’ sustainability. We analyze data from the listed Korean companies belonging to a large business group that issued corporate bonds for the period 2003–2015, and find that there is a positive relationship between fair disclosure and credit ratings; however, it is weakened as the control-ownership divergence increases. These results suggest that firms with a high quality of disclosure are assigned better credit ratings. However, if their governance structures are poor, the capital market may penalize the reliability of the released information. Full article
(This article belongs to the Section Economic and Business Aspects of Sustainability)
20 pages, 277 KiB  
Article
The Effect of R&D and the Control–Ownership Wedge on Firm Value: Evidence from Korean Chaebol Firms
by Minjung Kang, Sangil Kim and Moon-Kyung Cho
Sustainability 2019, 11(10), 2986; https://doi.org/10.3390/su11102986 - 26 May 2019
Cited by 7 | Viewed by 3504
Abstract
Cases have been reported in which research and development (R&D) investment, the core activity for a firm’s sustainable growth, deteriorate rather than increase firm value. This study illuminates the cause of such cases in terms of the control–ownership wedge. How expensed and capitalized [...] Read more.
Cases have been reported in which research and development (R&D) investment, the core activity for a firm’s sustainable growth, deteriorate rather than increase firm value. This study illuminates the cause of such cases in terms of the control–ownership wedge. How expensed and capitalized R&D affect firm value are examined separately for cases in which the wedge is high and low. In an analysis of Korean chaebol firms, when the wedge is high, significant negative relationships appear between expensed R&D and firm value, while no significant relationship appears between capitalized R&D and firm value. When the wedge is low, expensed R&D does not show any significant relationship with firm value, while capitalized R&D shows significant positive relationships with firm value. This confirms, first, that in cases of high wedge, suboptimal R&D decisions are made, in which the manager can discretionally determine investment targets or projects. Second, this indicates that even in cases of low wedge, the positive relationship between R&D and firm value does not appear in expensed R&D. This study suggests that investors and regulatory authorities should pay close attention to the initial stage of R&D in firms with high control–ownership wedges for sustainable economic growth. Full article
(This article belongs to the Section Economic and Business Aspects of Sustainability)
Back to TopTop