DOI 10.14707/ajbr.210113

Block Heterogeneity and Korean Firm Value: Chaebol vs. Non-Chaebol

DOI 10.14707/ajbr.210113

Hung-Sik Kim and Kyung-Shick Cho*
College of Management and Economics, Dongguk University Gyeongju Campus
*Corresponding author:


This study investigates the effect of block heterogeneity on corporate value in publicly-listed Korean companies during 2010-19. This study also examines whether there is a difference in the effect of blocks heterogeneity on Chaebol companies and non-Chaebol companies. We use block identities, portfolio sizes, and investment horizons as measures for blocks heterogeneity. We also use Tobin’s Q as a proxy for corporate value. The results show that there is a significant positive relationship between blocks heterogeneity and company value. This study also shows that blocks heterogeneity has a stronger influence on non-Chaebol companies than Chaebol companies. This means that there is a difference between Chaebol companies and non-Chaebol companies in the effect of block heterogeneity on firm value. This suggests that there will be both synergies and diversity benefits among blocks of non-Chaebol companies rather than Chaebol companies in the Korean stock market. This study is meaningful in that this study provides investors and business practitioners with information on the relationship between block heterogeneity and company value.

Keywords: Block heterogeneity, Firm value, Ownership, Governance, Chaebol and non-Chaebol firm, Blockholder.

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