재벌의 지주회사 전환이 소유집중과 이익조정에 미치는 영향

This paper examines the policy effects of korean chaebols’ transformations into holding companies. A holding company is a firm that has enough shares in one or more other companies to be able to control the other companies. Korean Fair Trade Commission(KFTC) defines the requirements to be holding company in its Monopoly Regulation and Fair Trade Act. A holding company needs to satisfy those conditions which its asset is more than 100 billion korean won, and its holding ratio exceeds 50%. The regulation authorities allow to establish a holding company in 1999, motivated by the Asian Economic Crisis in 1997. Under the crisis, some korean chaebol firms suffer a serial bankruptcies due to their pyramidal ownership structure. Korean government contrives to figure out how to reform the chaebols' concentrated governance structures driven by family-owned controlling shares. OECD also strongly recommends to adopt a holding companies system in korea to promote market transparency and restructuring of firms. Korean chaebols have been blamed for their economic concentrations through their pyramidal ownership structures. The serial policies to transform chaebols' governance into holding companies are placed as one of the most important regulations to decentralize chaebols' economic powers. KFTC summarizes the policy targets of holding companies as follows. First, the holding company governance provides more simple and transparent governance structures on account that it only allows vertical downward share investments but restricts co-sharing or circulation investments. Second, holding companies play their headquarter roles, thus become easier to clarify where the responsibility lies on most legal issues related to conglomerate group. Third, the separate and transparent governance structures of holding companies system make it easier to restructure the affiliated firms, such as in case of spin- offs or mergers. This paper tests whether transformations into holding companies alleviate chaebols' ownership concentrations. The regulation authorities expect to decentralize majority shareholders' ownership concentrations after transformations. Different from United States, which its holding companies hold 100% shares of its subsidiaries, korean holdings do not necessarily hold the full shares. Ali et al. (2007) presents the agency cost between majority shareholder and minority shareholders in a conglomerate group. Those disparities called the wedge, are common for most families-owned conglomerate group in East Asian regions. Furthermore this paper tests whether the transformation into holding companies may effect on the accounting qualities measured by discretionary accruals. KFTC announced that holding companies may raise the accounting qualities of the holdings and their subsidiary firms, suggesting that the complicated ownership structure of korean chaebols can be simplified subjected to the ownership restrictions provided by regulations. As a consequence, the investors and other interests are more easily monitoring the holding companies and their subsidiaries, this may raise the accounting qualities as well. The ownership structure turns to be simplified reflecting regulations provided by KFTC. On the other hand, the ownership concentrations can be intensified in such case that the control rights of majority shareholders are strengthened. Johnson et al. (2000) explains tunneling as the wealth transferred by controlling owner's infringement. Lim and Jo (2007) also show that korean affiliated firms reveals the tunneling as well. Yoon and Park (2002) present that the tunneling caused through internal trading shows a negative effects on stock price. It is commonly accepted that the motivation for earnings management may be accelerated for the firms from which the controlling owners infringe their wealth through tunneling (Hwa et al. 2004). The accounting qualities will be lowered when the controlling owners and the holding companies try to obtain the more dividend as the sources for re-investment. Prior studies report inconsistent result on the association between holding companies transformation and earnings management. Ji et al. (2008) show that earnings management becomes intensified with absolute values of discretionary accruals. To the contrary, Kim et al. (2009) report lowered levels of earnings management after transformation, with non-absolute vlaues of discretionary accruals. Samples are chaebol firms which their ownership structures are transformed into holding companies according to the regulation provided by KFTC. Different from prior studies, this paper is available to assure the robustness for establishing the testing samples. Prior studies fail to satisfy the robustness for sample firms such as excluding of the samples in transformation, checking the homogeneity of firms after transformation etc. Prior studies also include the holding firms inevitably transferred on the reason of asset increase. I modify those limitations on testing samples. Further, this test is focused on the chaebol firms only at which the regulations are targeted. Test results show that chaebols' ownership concentrations in conglomerate group level are intensified after the transformations. On the other hand, the agency costs in each affiliated firms are mitigated. And the discretionary accruals decrease after transformation, satisfying policy goals of KFTC, accounting qualities in holdings and their affiliates increase. This is derived by the effects of the transparency in governance structure, so it provides investors and other interested with more efficient monitoring on the conglomerate firms. An implication of findings is that the regulator driven transformation efforts into holding companies have succeeded in some policy targets, but not in others. This paper provides the robust and substantial empirical proofs to show whether the policies to induce chaebols to transform into holding companies have succeeded. Those findings may provide some practical insights for regulation authorities for other Asian countries. If holding companies transformations are able to mitigate the agency cost among conglomerate group, its policy effect may shed an indirect unprecedented insight for Asian countries which contrive to restructure the ownership concentrations by families-owned conglomerate group.