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The Effect of Target Ownership Structure in the Wealth Gains in Owner-Manager Dominant Acquisitions: Evidence from Korean Cases

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Authors
Cho, Seong-Ho
Issue Date
2009-06
Publisher
College of Business Administration (경영대학)
Citation
Seoul Journal of Business, Vol.15 No.1, pp. 39-64
Keywords
mergers and acquisitionsownership structuregovernance structureagency problemmanagerial entrenchmentchaebolowner manager
Abstract
This paper examines how the distribution of target ownership is

related to the wealth gains of target shareholders in owner-manager??

dominant acquisitions, in which a firm is managed by managers and

directors nominated and closely directed by controlling shareholders.

Using the Korean case of mergers and acquisitions during 1996-2007,

we find that the agency problem exists between owner-managers and

non-controlling shareholders. This finding is different from what we can

observe in the US case, where the agency conflict between managers

and shareholders is more crucial. In the meantime, the effect of the

bidders top 30 chaebol membership on the wealth of target

shareholders is inconclusive. In order to resolve the agency problem, the

presence of institutional shareholding may be effective.
ISSN
1226-9816
Language
English
URI
https://hdl.handle.net/10371/32067
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College of Business Administration/Business School (경영대학/대학원)Dept. of Business Administration (경영학과)Seoul Journal of BusinessSeoul Journal of Business Volume 15, Number 1/2 (2009)
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