The difference between measuring internal funds allocations in groups and in diversified firms

Dependent variables used by Kim, Jung and Kim (2005) to assess the effect of the ownership structure of Korean chaebols on internal funds allocations are a priori misspecified in the context of their research, as they were designed to be applied when studying diversified firms and not groups consisting of legally independent entities. The conditions under which this misspecification has no effect on their conclusions are discussed. Re-analyzing their data with a more appropriate internal funds allocation variable leaves their conclusion on the presence of tunnelling effects intact, though it paints a partly different picture of internal allocations as such. ? 2007 World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research.
Publisher
World Scientific Publishing Co
Issue Date
2007-09
Language
ENG
Citation

REVIEW OF PACIFIC BASIN FINANCIAL MARKETS AND POLICIES, v.10, no.3, pp.341 - 347

ISSN
0219-0915
URI
http://hdl.handle.net/10203/5306
Appears in Collection
MT-Journal Papers(저널논문)
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