한국개발연구. Vol. 28, No. 2, December 2006, pp. 131-177
This paper examines a simultaneous determination of corporate control mechanisms, and its effects on firm performance. The corporate control mechanisms considered include the following; insider shareholding, institutional shareholding, the board of directors, dividend policy, and capital structure. This paper applies a simultaneous equation methodology and investigates the interdependence among the corporate control mechanisms. In the first part, the paper finds that firm-level variations of control mechanisms are large across time although average variations are relatively small. These variations are related to one another, which is confirmed by Granger causality test based on dynamic panel autoregression model. More specifically insider shareholding, institutional shareholding and outside director ratio cause each other. With regard to interdependence among the control mechanisms, 2SLS(two stage least squares) regression results show that insider shareholding and institutional shareholding are substitutes while institutional shareholding acts as complements to the ratio of outside members in the board of directors. Then in the second part, the paper examines the relationship between firm performance and corporate governance. Firm performance, measured by Tobin’s Q, has a positive association with leverage ratio while that has a negative relation to outside director ratio. This suggests that there may be a room for reforming corporate governance in Korea. Specifically it is necessary to enhance the independence of the outside directors.
기업통제장치(Corporate Control Mechanism), 상호관계(Interdependence), 기업성과(Firm Performance)
G32, G34, L29