Internal labor markets and corporate innovation: Evidence from Korean chaebols

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This study investigates the effect of internal labor markets (ILMs) on corporate innovation, focusing on Korean chaebols. Prior to examining the effect of ILMs, we confirm their efficiency, finding that chaebol firms with lower (higher) growth opportunity exhibit higher (lower) sub-sequent labor outflows. Further, ILM efficiency is more pronounced for firms within a more diversified chaebol, those whose controlling shareholder has lower equity stakes, and during a financial crisis period. We then investigate the effect of ILMs on innovation. We find that ILM efficiency leads affiliated firms to show greater innovative performance. Moreover, this positive influence is more pronounced for firms that receive internal capital. Overall, our study suggests the importance of ILMs in promoting corporate innovation among group firms. (JEL G30, J40, L22, O33).
Publisher
ELSEVIER
Issue Date
2023-05
Language
English
Article Type
Article
Citation

INTERNATIONAL REVIEW OF ECONOMICS & FINANCE, v.85, pp.146 - 162

ISSN
1059-0560
DOI
10.1016/j.iref.2023.01.019
URI
http://hdl.handle.net/10203/304768
Appears in Collection
MT-Journal Papers(저널논문)
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