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지주회사의 본질과 정책과제(Holding companies: nature and policy)

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Title 지주회사의 본질과 정책과제(Holding companies: nature and policy)
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Material Type Reports
Author(Korean)

이재형

Publisher

[서울]:한국개발연구원

Date 2000
Series Title; No 정책연구시리즈
Pages 274
Language Korean
File Type Documents
Original Format pdf
Subject Industry and Technology < Entrepreneurship
Holding KDI; KDI School

Abstract

This study constitutes basic research on the nature and fundamental attributes of holding companies with regard to the business environment of Korea, to provide a reference for the discussion of policies regarding holding companies. There are three fundamental attributes of holding companies: a savings effect of capital for company control, a change effect of company control structure, and an evasion effect of government regulations and systems. All the functions of holding companies are based on these three attributes.
Even though holding companies argue that they can improve corporate efficiency through the separation of strategic decision making and ordinary management decisions, efficiency in personnel labor management, and the promotion of company integration, their arguments are not very convincing, as holding companies have extremely limited roles in company integration and there is no direct relation between corporate organization structure and efficiency. Also, in Korea, these arguments are impractical because it is more efficient to invest in the affiliates of chaebols (conglomerates) and it is not restricted to holding companies.
As for the holding company systems in other countries, the U.S. government controls public services, financial businesses, and holding companies, which causes anti-competitive effects. Japan has banned the establishment of holding companies to control chaebol for the past 50 years, however, since 1997 it allowed for the establishment of holding companies that do not threaten the concentration of economic power. In Europe, there is no specific regulation to limit holding companies. As for Korea, holding companies were strictly banned in 1986 in order to limit the concentration of economic power. However, the government allows holding companies as long as they do not cause any harmful concentration of economic power, and implemented strict limitations when establishing such companies. It is likely that small-scale and company split holding companies will emerge, rather than large-scale holding companies.
Holding companies cannot improve the corporate management structure because there is no direct connection between the company control structure and holding companies. Therefore, the government should investigate corporation system abuse through holding companies, and run regulation systems to prevent corporations from avoiding regulations through holding companies.