What is it about?
Korea provides a distinctive setting for understanding how companies make financial decisions and interact with financial markets. This study reviews two decades of research on corporate finance in Korea. It covers how Korean firms choose their capital structures and evaluate investments, raise capital through public and private equity, make payout decisions, interact with banks, and respond to corporate governance and control mechanisms. The review also examines differences between firms affiliated with large Korean business groups, known as chaebols, and independent firms and identifies areas where further research is needed.
Featured Image
Why is it important?
Korea has experienced substantial economic and financial development, while its distinctive corporate structures and financial markets have generated a large body of research. This study provides the first comprehensive review of the post-crisis corporate finance literature on Korea, bringing together findings from studies that had previously examined individual topics separately. By organizing the evidence across major areas of corporate finance, the study provides a broader understanding of how Korean firms make financial decisions and interact with financial markets. It also identifies important questions for future research and provides a foundation for comparing corporate financial practices in Korea with those in other countries.
Perspectives
The motivation for this study came from recognizing the growing body of corporate finance research on Korea and the need to bring its findings together in a comprehensive review. Korea provides an important setting for corporate finance research because of its rapid economic development, evolving financial markets, and distinctive corporate structures, particularly the role of chaebols. We wanted to synthesize what the literature had learned about Korean firms’ financial policies and their interactions with financial markets while identifying areas where important questions remained unanswered. I hope this study helps researchers better understand the development of corporate finance research on Korea and provides a useful foundation for future research and cross-country comparisons.
Dr. Hongbok Lee
Western Illinois University
Read the Original
This page is a summary of: Advances in the corporate finance literature: a survey of recent studies on Korea, Managerial Finance, January 2018, Emerald,
DOI: 10.1108/mf-10-2017-0390.
You can read the full text:
Contributors
The following have contributed to this page
