Soonkyoo Choe

The Transformation of Korean Business Groups after the Asian Crisis 1

Abstract This study examines the evolution of Korean business groups after the economic crisis. In particular, we investigate the post-crisis changes in their business structure and corporate governance system, which are argued to be major precipitating factors leading to the economic crisis. Our analysis suggests that the divestment intensity of non-core, highly indebted and low intra-group trade firms was higher for groups which survived the economic crisis, compared to the bankrupt groups. Besides, most surviving groups did not pursue diversification as actively as before the crisis, and their financial conditions remained favourable in the post-crisis period. The corporate governance of the groups has also improved in terms of corporate transparency, implementation of monitoring mechanisms and their accountability to shareholders. Therefore, it seems that Korean business groups have successfully implemented radical corporate transformation to adapt to the changed business environment after the crisis. But, the dominance of family management still remains as an important feature of Korean business groups.

Impact of host country institutional context on subsidiary performance

Purpose – The purpose of this paper is to examine the impact of quality of market supporting institutions (institutional quality) in host country and the similarities and differences of institutional quality between the home and host country (institutional distance) on subsidiary performance. Design/methodology/approach – Based on the conceptualization of new institutional economics, the authors divide quality of host country institutions into factor markets; product, capital, labor market and sociopolitical dimensions. The authors examine the impact of the quality these institutional dimensions in host countries and their difference between home and host country on the performance of 318 subsidiaries of 146 Korean listed manufacturing firms operating in 28 host countries from 2001 to 2006. Findings – The empirical results based on 1,129 observations show that institutional distance explains a significant variance in the subsidiary performance. In particular, the difference in quality of institutions in p...

The Impact of International Experiences on Corporate Social Performance: A Case of Korean MNCs

While corporate social performance has been discussed mainly in the context of internal organizational factors and of domestic markets, MNCs have developed corporate social performance, learning from international experiences. This study integrates stakeholder theory, institutional theory and global strategy, and suggests a relationship between MNCsi¯ international experiences and corporate social performance. In the host markets, MNCs should comply with the norms, regulations and the expectations desired by varying types of social actors. Accordingly, having more international experiences is likely to lead MNCs to better corporate social performance. Further, entries into countries where the behavioral standards are set higher than others, may cause increases in corporate social performances. However, since foreign entries are costly, excessive international experiences may discourage MNCs from pursuing corporate social performance. Hence, we hypothesize an inverted U-shaped relationship between internat...