Abstract
Agency problems can become more serious during an economy-wide financial
crisis and they can have different roles depending on the corporate
governance structure of a company. This paper examines whether agency
problems explain the performance of Korean companies during the Asian
financial crisis and whether agency problems explain the performance
differently for chaebol vs. non-chaebol firms. Korean business groups,
chaebols, are known to have weaker corporate governance structures
than non-chaebol firms. The results show that the performance during
the crisis is somewhat closely related to agency problems. In addition,
the paper presents some evidences that the role of agency problems
depends on corporate governance structures. © 2003 Elsevier Science
B.V. All rights reserved.
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