기업다각화 수준과 이익유연화 간의 관계: 재벌과 소유권집중도의 조절효과를 중심으로

Although a parent company and a subsidiary are legally separate companies, accounting standards make it mandatory to prepare consolidated financial statements as one economic entity if there is a control-subsidiary relationship between companies. In other words, from an accounting point of view, a parent company with a consolidated subsidiary can be defined as a diversified company that is consolidated through equity. The purpose of this study is to empirically investigate whether a company with a high level of corporate diversification strengthens internal control among consolidated companies and, as a result, restricts the management of the parent company from using its discretion to flex its profits. In addition, we investigate whether the relationship between corporate diversification and income smoothing changes depending on the intensity of (i) regulation and market surveillance (proxy variable: chaebol) and (ii) internal monitoring by major shareholders (proxy variable: ownership concentration). The analysis results of this study are summarized as follows. First, we find that the strength of the parent company's income smoothing decreases as the level of corporate diversification increases. These results suggest that firms with a high level of diversification increase internal control among consolidated companies, and income smoothing decreases because strengthened internal control limits the discretion of the parent company's managers. Second, we confirm that the negative relationship between corporate diversification and income smoothing is stronger in the chaebol samples than in the non-chaebol samples. This indicates that diversified chaebol companies have greater restraints on the discretion of the management of the parent company due to strong external monitoring and internal control among associates. Finally, we confirm that the negative relationship between corporate diversification and income smoothing is significantly increased in companies with high ownership concentration. This means that a diversified company with a high concentration of ownership limits the discretion of the management of the parent company to a greater extent due to internal monitoring of the controlling shareholder and internal control among associates. Overall, this study find that a company that diversifies by forming a corporate group has the effect of limiting short-term-oriented behaviors of managers by increasing internal control between companies, and that this effect increases when combined with external and internal monitoring.