The inflow of foreign capital into the Korean domestic market has greatly increased since the financial crisis. We cannot deny lots of positive economic benefits of the increased penetration of foreign capital into Korea. However, serious concerns about the negative effects of foreign capital have been raised. It has been suggested that foreign shareholders demand excessive dividends and, due to excessive dividends and domestic companies' efforts for the protection of management rights, the investment by domestic companies has decreased .
This paper empirically finds that the increased penetration of foreign capital into Korea did not cause both excessive dividends and the shrink of investment by domestic companies. It also suggests that hostile takeovers of major Korean companies by foreign capital are rare events. Moreover, hostile takeovers do not have only a dark side. A better means of addressing the threat of hostile takeovers by foreign capital may not actually be the introduction of new instruments for the protec- tion of management rights, but continued market reform. It would almost certainly become much more difficult for foreign capital to conduct hostile takeovers if corporate value increases due to improve- ment in the transparency of corporate governance as a result of on-going market reform.
외국자본 진출 확대의 영향과 대응방안(Effects of the increased presence of foreign capital in Korea, and related policies)
배당 및 투자에 대한 영향과 적대적 M&A 위협을 중심으로(Effects on the dividends and investments, and hostile takeover)
|Series Title; No||금융조사보고서 / 2005-14|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|