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Corporate governance and firm performance in Korea

Kim, Hyo Jin, and Yoon, Soon Suk, (2007) Corporate governance and firm performance in Korea. Malaysian Accounting Review, 6 (2). pp. 1-16. ISSN 1675-4077

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Affiliations

Chonnam National University, Korea
Chonnam National University, Korea

Abstract

We investigate how firm performance is related to corporate governance in Korea. We find that the adoption of an audit committee itself does not significantly improve the level of firm performance. However, we find that there is positive relationship between the outside directors’ activity level and firm profitability. This suggests that outside directors can play a role of reducing agency conflicts between management and external shareholders so that theprofitability is positively with their activity. Furthermore, we also find that for the firms where audit committees are voluntarily adopted, increased activities by minority shareholders and higher ownership by foreign investors tend to affect the profitability positively.

Item Type:Journal
Keywords:corporate governance, firm performance, audit committee, minority, Korea shareholders.
Subjects:H Social Sciences, Economics, Sociology
ID Code:10643

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