CORPORATE GOVERNANCE AND FIRM PERFORMANCE IN KOREA

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Hyo Jin Kim Soon Suk Yoon

Abstract

We investigate how firm performance is related to corporate governance in Korea. We find that the adoption of an audit committee itself does notsignificantly 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 the profitability 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 toaffect the profitability positively. Overall, our results partially support the hypothesis that corporate governanceand firm performance are positively related. 
Keywords: corporate governance, firm performance, audit committee, minority shareholders.

Article Details

How to Cite
KIM, Hyo Jin; YOON, Soon Suk. CORPORATE GOVERNANCE AND FIRM PERFORMANCE IN KOREA. Management & Accounting Review (MAR), [S.l.], v. 6, n. 2, p. 1-16, dec. 2007. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/509>. Date accessed: 23 june 2018.
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