Ownership structure and family control in Korean conglomerates

Abstract

The Korean enterprise group, known as chaebol, is unique for its corporate form consisting of a pyramid of subsidiary firms operated by a single line of family. This study investigates how the family of chaebol system has been able to exert its control over a wide range of businesses with its limited resources. It finds that the chaebol families, for the attainment of proper control, have maintained a certain amount of inside shareholding in various forms; share ownership by family itself, affiliate firms, non-profit organizations, and employees. At the same time, families of conglomerates have created intricate web of ownership network to grip the control in different styles; direct family control, indirect family control via a base company, indirect family control via non-profit institutions, and indirect family control via a combination of base company and outside institution.This study is conducted on the basis of support from The Asia Research Fund.

Citation

Lim, U. (2001), "Ownership structure and family control in Korean conglomerates", Choi, J.J. (Ed.) Asian Financial Crisis Financial, Structural and International Dimensions (International Finance Review, Vol. 1), Emerald Group Publishing Limited, Leeds, pp. 379-410. https://doi.org/10.1016/S1569-3767(00)01016-5