본 연구에서는 대규모기업집단 소속기업들의 투자효율성에 대해 분석하였다. 과거의 국내외 연구들은 대규모기업집단 소속기업들이 비효율적이고 많은 문제점을 가지고 있다고 보고한 경우가 많았다. 그러나 최근 수행된 다수의 연구들은 오히려 대규모기업집단 소속기업들이 기타 기업들에 비해 우수하다는 증거들을 다수 제시하고 있다. 본 연구에서 대규모기업집단 소속기업들을 기타 기업들과 비교한 결과 투자효율성이 높다는 증거를 발견하였다. 첫째, 대규모기업집단 소속기업들은 과소투자가 이루어질 가능성이 높은 상황에서 다른 기업들 보다 많은 투자를 하고 있었으며, 과대투자가 이루어질 가능성이 높은 상황에서는 다른 기업들보다 적은 투자를 수행하고 있었다. 둘째, 추가적으로 대규모기업집단 소속기업들만을 대상으로 분석해본 결과, 지배주주의 현금흐름 수취권리가 높은 기업이나 기업집단의 중핵기업이 과대투자가능성이 높은 상황에서 그렇지 않은 기업들보다 투자가 적어, 높은 투자효율성을 보였다. 그러나 지배주주의 소유지배괴리 수준, 피라미드식 혹은 순환출자 형태의 소유구조는 투자효율성과 유의한 관계를 보이지 않았다. 마지막으로, 대규모기업집단 소속기업들은 사외이사 비율이 높은 기업이 과대투자가능성이 높을 때 상대적으로 투자가 적어 투자효율성이 높았다. 그 밖에 사외이사의 전문성 혹은 활동성은 투자효율성과 유의한 관계가 없었다. 이런 발견들은 기업집단과 지배구조의 역할에 대해 여러 중요한 시사점들을 제시해 주고 있다.

This paper investigates two issues related to investment efficiency: (1) How affiliation with family-controlled large business conglomerates in Korea (Chaebol) influences investment efficiency, and (2) among firms belonging to Chaebol groups, how the governance mechanisms at the conglomerate-level and firm-level influence investment efficiency. There has been a prolonged controversy on the role of business conglomerates. Familycontrolled large business conglomerates are found in many countries, including Asian and European countries. La Porta et al. (1999) report that these firms are mostly controlled by the concentrated ownership of families. Many prior studies criticize that firms belonging to business conglomerates engage in non-value maximizing activities to increase the influence of controlling shareholders. For example, in some cases, firms engage in tunneling activities to transfer wealth from a firm to another firm over which controlling shareholders have more cash flow rights. In other cases, several firms in the conglomerate help another firm that is in financial difficulties. This behavior is called propping. Controlling shareholders of business conglomerates build large empires and try to increase the assets under their control. For this purpose, controlling shareholders engage in tunneling or propping, which results in the sacrifice of the wealth of minority shareholders (Betrand et al. 2002; Cheung et al. 2006; Kim 2008; Jian and Wong 2010; Kwon et al. 2012). For these reasons, firms belonging to business conglomerates may make inefficient investments that result in inferior firm performance. Several studies using Korean data confirm this argument (Choi and Cowing 1999; Chang 2003; Joh 2003: Kim 2011). Studies in accounting also document evidence that confirms this argument. For example, Fan and Wong (2003) find that as the ownership divergence between cash flow rights and voting rights of business conglomerates increases, the earnings response coefficient decreases. In contrast to these criticisms of the business conglomerate, several recent studies have started to report on the beneficial roles of business conglomerates. Using Indian data, Siegel and Choudhury (2012) report that firms in business conglomerates engage in more long-term business strategy and research and development activities. Additionally, Khanna and Palepu (2000) report that business conglomerates more efficiently use internal cash and thus lower information asymmetry. These findings are consistent with those of Korean studies. Lee et al. (2010) document that Korean business conglomerates changed their behaviors after the 1997 financial crisis. Thus, they exhibit higher profitability and less volatility than other firms. Their leverage ratio has also dropped, suggesting that they are less likely to use external debt financing. Similarly, Kim (2012) reports that firms belonging to business conglomerates grow more rapidly, have a higher level of investment with higher profitability. Park and Jung (2011) argue that business conglomerates create synergy effect that help the survival and restructuring process. In summary, the findings of recent studies generally suggest that business conglomerates are not likely to engage in inefficient investments. In addition, prior studies on the issue mostly use naive and descriptive methods. They simply compare the level of investments and future ( ex post) profitability with benchmark firms. Although this analysis is suggestive, it does not control for other factors that may be related to the investment level. Using the sophisticated method developed by Biddle et al. (2009), this study investigates the investment efficiency issue related to business conglomerates. Biddle et al.`s (2009) method classifies firms into two subsamples: the situation in which over-investment is likely to occur and the opposite situation in which under-investment is likely to occur. The samples used in this study are Korean listed firms (excluding firms in the banking and finance industries) over the period from 2001 to 2009. Data on business conglomerates are collected from the website of the Korean Fair Trade Commission. The final sample size is 6,217 firm-year observations from 1,177 firms. Among them, 803 observations belong to firm in family-controlled business conglomerates. Our empirical results are summarized as follows. First, consistent with the findings in most of the recent studies, we find that firms belonging to business conglomerates engage in less over-investment (under-investment) than other firms when they are in situations in which over-investment (under-investment) is likely to occur. Second, among conglomerate-level governance mechanisms, we find that firms with high cash flow rights and firms that play a central role in the conglomerate, respectively, engage in less over-investment than other firms when over-investment is likely to occur. Ownership divergence, firms` position in pyramid-type structures, and circular shareholdings are not related to the investment efficiency. Third, among firm-level governance structures, we find that firms with a high ratio of independent outside directors are likely to engage in less over-investment than other firms when overinvestment is likely to occur. In contrast, the ratio of grey directors, board members with other directorships, existence of accounting experts among outside board members, and ratio of board meeting attendance by outside directors are not significantly related to investment efficiency. These findings, combined together, provide valuable implications to regulators, firms, and other interested parties. We hope future studies investigate related issues further to clarify the role of business conglomerates and their governance mechanisms.