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Title: Ownership structure and operational efficiency in emerging market: the case of Korea
Authors: Jayoun Won; Sang-Lyul Ryu
College of Business and Economics, Korea University, 2511 Sejong-ro, Sejong, 30019, South Korea
College of Business, Konkuk University, 120 Neungdong-ro, Gwangjin-gu, Seoul, 05029, South Korea
Abstract: This paper explores the relationship between the ownership structure and operational efficiency in Korean manufacturing firms for 2002-2013. Korea experienced the 2008 world economic crisis during this period. We break the sample period down into three sub-periods: Pre-crisis (2002-2007), mid-crisis (2008-2010), and post-crisis (2011-2013). The main results in this study are summarised as follows. First, operational efficiency was higher during the post-crisis period than in the pre-crisis period. Second, we observe that equity ownerships by the largest shareholder and board members are positively related to operational efficiency across the whole sample period. Third, manufacturing firms with more highly concentrated ownership had higher efficiency scores during the pre-crisis period. Fourth, firms with higher board member shareholdings were dedicated to improving operational efficiency during the crisis. Fifth, we discovered that foreign investors have positively influenced firms' operational efficiency after the 2008 economic crisis.
Keywords: ownership structure; operational efficiency; DEA; data envelopment analysis; economic crisis; emerging markets; South Korea; manufacturing industry.
Int. J. of Trade and Global Markets, 2017 Vol.10, No.1, pp.99 - 107
Available online: 19 Feb 2017