Abstract
Various corporate governance initiatives were adopted in Korea following
a major corporate governance failure, identified as a direct cause
of the Asian Financial Crisis of 1997-1998. Our findings indicate
that, before the crisis, the likelihood of replacing poorly performing
CEOs was not related to business group (chaebol) affiliation. However,
after the Asian Financial Crisis, we find CEO turnover sensitivity
to performance is greater in chaebol firms than in stand-alone firms.
These findings indicated improved monitoring following reforms initiated
by the Korean government, NGOs and other capital market participants.
These findings have implications for the effectiveness of corporate
governance in US firms following governance restructuring imposed
by the SEC, the government and various market participants. © 2006
Blackwell Publishing Ltd.
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