| Popis: |
We propose new metrics to describe the complex ownership structure of business groups, and provide simple formulas and algorithms to compute these metrics. Our formulas allow us to compute cash flow and control rights for any group firm, irrespective of the degree of complexity of the group structure. Unlike previous literature, we can easily incorporate the effects of cross-ownership links in these calculations. Our algorithms also allow us to compute a precise measure of the degree of indirect (pyramidal) ownership of a group firm (the position of the firm in the group structure), to identify the presence of cross-shareholding loops involving any arbitrary number of firms, and to identify which firms are central to the control structure of the group. We illustrate these measures by describing in detail the ownership structure of Korean chaebols in the period of 1998 to 2004. In addition, we validate the usefulness of our new metrics by showing empirically that they are related to the valuation and performance of chaebol firms. Among other results, we show evidence that central firms and firms in cross-shareholding loops have lower valuations than other public Chaebol firms. The lower valuation of these firms is not explained by variation in measures of ownership concentration, and separation between ownership and control. |
