R e s e a r c h
Research interests
I am currently working on South Korean business groups, commonly called "chaebols". Chaebols emerged after the World War II and witnessed strong growth after the Korean War with the government's support. Hand in hand with the government, chaebols contributed to the unprecedented development of the South Korean economy. Despite crises, governance issues, and reform efforts, they have remained the spreadhead of the Korean economy until today.
Publications
Peer-reviewed publications
Chasing dividends during the COVID-19 pandemic (with N. Eugster, D. Isakov, and J.-P. Weisskopf)
International Review of Finance, 2022, 22(2), pp. 335-345, https://doi.org/10.1111/irfi.12360
Abstract: This paper investigates the impact of the coronavirus disease 2019 pandemic on investors' trading behaviors around ex-dividend dates in Europe. The sudden decrease in the number of companies paying dividends reduced the opportunities to capture dividends. Thus, the firms that maintained dividend payments during the pandemic attracted more interest than before. This led to a doubling in the magnitude of stock return patterns usually observed around ex-dividend days. Our evidence indicates that dividend-seeking investors are likely to be the main driver of the price patterns observed around ex-dividend dates.
The Korea Discount and chaebols (with D. Isakov)
Pacific Basin Finance Journal, 2020, 63: 101396, https://doi.org/10.1016/j.pacfin.2020.101396
Abstract: Finance practitioners frequently claim that stocks of Korean firms are undervalued and trade at a discount relative to foreign firms. This phenomenon is commonly called "the Korea discount". It is based on anecdotal evidence comparing either the price-earnings ratios of different market indexes or those of different individual stocks. This paper provides empirical evidence on the existence of such a discount using a large sample of stocks from 28 countries over the period 2002-2016. We find that Korean stocks have significantly lower price-earnings ratios than their global peers. We also investigate the role of large business groups called chaebols, which are often considered to be the main cause of the discount because of their poor corporate governance. Our findings show that it is not the case.
Presentation: Paris Financial Management Conference 2019 (IPAG, Paris)
Other publications
Does Affiliation to a Korean Chaebol Group Impact Firm Performance?
International Business Perspective- EIBAZINE, 2017, Issue 21, November, 13-15 (link)
Working papers
Investors’ perception of business group membership during an economic crisis: Evidence from the COVID-19 pandemic
(Latest update: SSRN) (Working Paper Unifr )
Abstract: This paper examines how investors perceive business group membership in Korea during the COVID-19 pandemic. Evidence of a time-varying and heterogeneous value of affiliation emerges from stock price performance analysis. I find that investors discount business group affiliation during a market collapse, but are willing to pay a premium for affiliation during market recovery. Overall, this pattern is more pronounced for financially weak affiliates and large business groups. Results also show that business group membership alleviates investors’ concerns regarding financial flexibility highlighting the role of internal capital markets as a substitute to external finance.
Presentation: Vietnam Symposium in Banking and Finance 2021 (Banking Academy of Vietnam, Hanoi), World Finance & Banking Symposium 2021 (Corvinus University of Budapest), Financial Markets and Corporate Governance Conference 2022 (Monash University, Melbourne), International Conference of the French Finance Association (AFFI) 2022 (Saint-Malo), Hospitality Finance & Economics Conference 2022 (EHL Hospitality Business School), Yonsei School of Business (2022)
Business group heterogeneity and firm outcomes: Evidence from Korean chaebols (with D. Isakov)
Abstract: This paper examines the impact of business group affiliation on the performance and corporate policies of Korean listed firms over the period 2007-2019. This study proposes a novel approach allowing the observation of heterogeneity in the affiliation effects. Overall, we conclude that business group characteristics are reflected in firm outcomes. We find that investors perceive group membership positively as they pay a premium to hold affiliated firms. The premium is related to profitability and size of business groups, consistent with resourcebased theories. The analysis also identifies significant group specific effects on firm policies. These findings suggest that several business groups follow group-level strategies and apply homogeneous financial and investment policies to all their affiliates.
Presentation: Financial Markets and Corporate Governance Conference 2023, Asian Finance Association Annual Conference 2023 (UEH, Ho Chi Minh)
Media coverage: The FinReg Blog (Duke Financial Economics Center) (link)