2019, Vol.30, No.3

Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

pISSN : 2384-3209
https://journal.kci.go.kr/kiri

This study constructs the model that has two types of financial accelerator mechanism. The one suggested by Bernanke, Gertler, Gilchrist(1999) works through the firm and the other suggested by Gertler, Karadi(2011) works through the bank. The effects of net worth shocks of the firm and the bank on the business cycle in the Korean economy for the period of 2003-2018 is investigated with the model. Net worth shocks are estimated with the equity share data of the money flow table announced by the Bank of Korea. The firm’s net worth shock shows the significant effect on the business cycle while the effect of the bank net worth shock is negligible. This implies that the financial acceleration mechanism of the firm is more essential than that of the bank when the empirical DSGE model is specified in the Korean economy.

This paper analyzes the performance of pension savings products by using the information provided by the Financial Supervisory Service. As a result of analyzing the long-term returns of the products (n=221) that have passed 12 ~ 17 years after the sales in the first half of 2018, the average nominal rate of return is 3.63%, which is 0.30%p and 1.35%p higher than 1 year deposit rate and inflation rate, respectively. Regression analysis between commissions and returns for a similar pension savings insurance product (n=137) showed a statistically significant negative relationship. This means that information on commission rate is a very important factor to consumer’s investment decision. In order to improve the performance of pension savings products, regulators should work to increase the accuracy of data and provide informative information to decision makers, such as changing disclosure information based on actual performance. It is also necessary to consider the measures such as the case of Germany and Sweden to convey understandable information and guidance to change the product for customers.

This study investigates the determinants of nepotism by a controlling shareholder and its effect on firm value, using firms listed in Korea Exchange. After dividing a type of CEO into controlling shareholders, their children, and other relatives, we find the likelihood that controlling shareholders’ children is appointed as a CEO significantly increases in firms with high profitability, good industry outlook, and low risks. We also show that when children or other relative is appointed as a CEO, the firm value is significantly lower. These results are consistent with Perez-Gonzalez (2006) that nepotism can hurt minority shareholders’ wealth by restricting the efficiency of the managerial labor market. This study has the academic implication for presenting empirical evidence that controlling shareholders’ intention to succeed the management rights of profitable firms to their children can aggravate the firm value.