- Korea •
- Corporate governance •
- corporate governance index •
- law and finance •
- firm valuation •
- board of directors •
- Emerging markets
Prior work in emerging markets provides evidence that better corporate governance predicts higher market value, but very little on the specific channels through which governance increases value. We provide evidence, from a natural experiment in Korea, that reduced tunneling can be an important channel.
In a companion paper, Bernard Black and Woochan Kim, The Effect of Board Structure on Firm Value: A Multiple Identification Strategy Approach Using Korean Data (working paper 2008), http://ssrn.com/abstract=968287, we seek to identify Korean board structure reforms as likely causing an increase in firm market value.
For our earlier cross-sectional research on Korean corporate governance, see:
Bernard Black, Hasung Jang and Woochan Kim, Does Corporate Governance Affect Firms' Market Values? Evidence from Korea,: 22 Journal of Law, Economics and Organization 366-413 (2006), nearly final version at http://ssrn.com/abstract=311275.
Bernard Black, Hasung Jang & Woochan Kim, Predicting Firms' Corporate Governance Choices: Evidence from Korea, 12 Journal of Corporate Finance 660-691 (2006), nearly final version at http://ssrn.com/abstract=428662.