DETERMINANTS OF THE CORPORATE GOVERNANCE OF KOREAN FIRMS

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Abstract

This paper investigates the determinants of the corporate governance of the firms listed on the Korea Stock Exchange. We find that ownerships by controlling shareholders tend to have negative effects on their corporate governance, and the negative effects are more significant on the board structure and the managerial transparency of the sample firms. On the other hand, foreign shareholders exercise positive effects while institutional investors are shown to be passive on the corporate governance issues. The empirical results suggest that investors’ or regulator’s effort to improve the corporate governance of Korean firms should be directed to the improvement of the board structure and managerial transparency.

Keywords: Corporate Governance, Board Structure, Managerial Transparency, Controlling Shareholders, Institutional Investors, Foreign Investors

How to cite this paper: Lee, E., & Park, K. S. (2008). Determinants of the corporate governance of Korean firms. Corporate Ownership & Control, 5(2), 15-23. https://doi.org/10.22495/cocv5i2p2