Tunneling or value added ? evidence from mergers by Korean business groups

Deskripsi

We examine whether firms belonging to Korean business groups ( chaebols ) benefit from acquisitions they make or whether such acquisitions provide a way for controlling shareholders to increase their wealth by increasing the value of other group firms ( tunneling ). We find that when a chaebol-affiliated firm makes an acquisition, its stock price on average falls.While minority shareholders of a chaebol affiliated firm making an acquisition lose, the controlling shareholder of that firm on average benefits because the acquisition enhances the value of other firms in the group..Printed Journal