콘텐츠 바로가기
로그인
컨텐츠

Category Open

Resources

tutorial

Collection of research papers and materials on development issues

home

Resources
Economy Financial Policy

Print

How does corporate governance risk at home affect investment choices abroad?

Related Document
Frame of Image
  • How does corporate governance risk at home affect investment choices abroad?
  • Kim, Woochan; Sung, Taeyoon; Wei, Shang-Jin
  • National Bureau of Economic Research


link
Title How does corporate governance risk at home affect investment choices abroad?
Similar Titles
Material Type Reports
Author(English)

Kim, Woochan; Sung, Taeyoon; Wei, Shang-Jin

Publisher

Cambridge:National Bureau of Economic Research

Date 2008-01
Series Title; No NBER Working Paper Series / 13721
Pages 58
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Original Format pdf
Subject Economy < Financial Policy
Holding National Bureau of Economic Research

Abstract

Disparity between control and ownership rights gives rise to the risk of tunneling by the controlling shareholder, and is prevalent in many emerging market economies and present in some developed countries. At the same time, international investors come from different countries whose home markets are characterized by varying degrees of control-ownership disparity. This paper studies whether this difference in investors' home countries affects their portfolio choice in an emerging market. It combines two unique data sets on ownership and control in business groups, and investor-stock level foreign investment in Korea. A key finding is that, investors from low-disparity countries disfavor high-disparity stocks in Korea, but investors from high-disparity countries are indifferent. Moreover, investors from low-disparity countries became averse to disparity only after the Asian financial crisis. (The rest omitted)