상품시장에서의 경쟁, 소유-지배 괴리도와 이사회 특성

This paper investigates how the effect of ownership disparity of controlling shareholders on board monitoring is influenced by the competitive threat in product markets. Empirically, we confirm that the ownership disparity has significantly negative effect on the board monitoring as presented in previous literatures. However, this effect is strongly observed in less competitive product markets, while decreases or disappears in more competitive product markets. We can interpret this result as disciplinary effect of the competitive threat: as controlling shareholders' incentive to persue private benefit of control is mitigated by the competitive threat, they would not undermine the board monitoring. This effect is robust to control for endogeneity problem, and to alternative measures of product market competition and board monitoring. Additionally, using the adoption of anti-takeover provisions as a dependent variable, the disciplinary effect of the competitive threat is consistently observed. Extending the previous studies (Karuna, 2007, 2010; Giroud and Mueller, 2011), we examine the effect of interaction between product market competition and internal corporate governance on the board monitoring in Korean economy. Yet, in the process, we are the first who focus on the controlling shareholders’ ownership disparity between cash flow rights and control rights which is rarely observed in developed countries. By focusing on that, we provide new hypotheses which are suitable for Korean market. The assumption that internal corporate governance is formed by being affected by one particular factor is very restricted and hard to generalize. It is formed by being influenced by interactions among various internal firm characteristics and external environmental factors. Therefore, we provide generalized hypotheses and academic implications by considering the ownership disparity as well as the product market competition. The results of this paper provide a critical political implications as well. In the Korean economy, the discipline on the agency problem is dependent mainly on the board monitoring, due to the weakness and inefficiency of other external control mechanisms such as market for corporate control and corporate managerial market. However, the regulations on the corporate governance should minimize the social and economic costs and maximize the benefit from it at the same time. In this context, the results of this paper imply that the regulations should be made by considering market structure: regulations that force intensive board monitoring should be focused more on the firms in less competitive industries. In addition, our results imply that the competitive threat could be regarded as an effective control device which could substitute the other external control mechanisms to diminish the agency problems