Related-Party Transactions, Chaebol Affiliations, and the Value of Cash Holdings

Sustainability

Jungeun Cho¹  Hyunjung Choi² 

[1] College of Business Administration, Pukyong National University, Busan 48513, Korea;College of Global Business and Technology, Sungkyul University, Anyang-si 14097, Korea;

关键词: related-party transactions;    value of cash holdings;    chaebol;    corporate governance;   

DOI  :  10.3390/su13020699

来源: DOAJ

【 摘 要 】

This study examines whether related-party transactions (RPTs) impact the value of firms’ cash holdings. Using a 2011–2018 sample of Korean public firms, we find that greater RPTs lead to lower cash holdings value. In particular, this decline is more pronounced in Korean chaebol firms than in non-chaebol firms. Our findings suggest that a unique and complex corporate governance structure of chaebol firms makes it difficult for outside investors to monitor firms’ internal cash management decisions, resulting in a negative valuation of cash holdings. This study contributes to the extant literature by providing additional evidence that RPTs in chaebol firms with severe agency problems may lower the value of cash holdings.

【 授权许可】

Unknown