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@article{ART002500521},
author={Kang Hyung Cheol and Hee Sub Byun},
title={Nepotism in Korean Family Firms},
journal={Journal of Insurance and Finance},
issn={2384-3209},
year={2019},
volume={30},
number={3},
pages={71-108},
doi={10.23842/jif.2019.30.3.003}

TY - JOUR
AU - Kang Hyung Cheol
AU - Hee Sub Byun
TI - Nepotism in Korean Family Firms
JO - Journal of Insurance and Finance
PY - 2019
VL - 30
IS - 3
PB - Korea Insurance Research Institute
SP - 71
EP - 108
SN - 2384-3209
AB - 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.
KW - Family management;Nepotism;CEO turnover;Managerial labor market;Firm value
DO - 10.23842/jif.2019.30.3.003
ER -

Kang Hyung Cheol and Hee Sub Byun. (2019). Nepotism in Korean Family Firms. Journal of Insurance and Finance, 30(3), 71-108.

Kang Hyung Cheol and Hee Sub Byun. 2019, "Nepotism in Korean Family Firms", Journal of Insurance and Finance, vol.30, no.3 pp.71-108. Available from: doi:10.23842/jif.2019.30.3.003

Kang Hyung Cheol, Hee Sub Byun "Nepotism in Korean Family Firms" Journal of Insurance and Finance 30.3 pp.71-108 (2019) : 71.

Kang Hyung Cheol, Hee Sub Byun. Nepotism in Korean Family Firms. 2019; 30(3), 71-108. Available from: doi:10.23842/jif.2019.30.3.003

Kang Hyung Cheol and Hee Sub Byun. "Nepotism in Korean Family Firms" Journal of Insurance and Finance 30, no.3 (2019) : 71-108.doi: 10.23842/jif.2019.30.3.003

Kang Hyung Cheol; Hee Sub Byun. Nepotism in Korean Family Firms. Journal of Insurance and Finance, 30(3), 71-108. doi: 10.23842/jif.2019.30.3.003

Kang Hyung Cheol; Hee Sub Byun. Nepotism in Korean Family Firms. Journal of Insurance and Finance. 2019; 30(3) 71-108. doi: 10.23842/jif.2019.30.3.003

Kang Hyung Cheol, Hee Sub Byun. Nepotism in Korean Family Firms. 2019; 30(3), 71-108. Available from: doi:10.23842/jif.2019.30.3.003

Kang Hyung Cheol and Hee Sub Byun. "Nepotism in Korean Family Firms" Journal of Insurance and Finance 30, no.3 (2019) : 71-108.doi: 10.23842/jif.2019.30.3.003