Asset Details
Do you wish to reserve the book?
Effects of Outsider's Monitoring on Capital Structure and Corporate Growth Strategy: Evidence from a Natural Experiment
Hey, we have placed the reservation for you!
By the way, why not check out events that you can attend while you pick your title.
Oops! Something went wrong.
Looks like we were not able to place the reservation. Kindly try again later.
Are you sure you want to remove the book from the shelf?
Effects of Outsider's Monitoring on Capital Structure and Corporate Growth Strategy: Evidence from a Natural Experiment
Do you wish to request the book?
Effects of Outsider's Monitoring on Capital Structure and Corporate Growth Strategy: Evidence from a Natural Experiment
Please be aware that the book you have requested cannot be checked out. If you would like to checkout this book, you can reserve another copy
We have requested the book for you!
Your request is successful and it will be processed during the Library working hours. Please check the status of your request in My Requests.
Oops! Something went wrong.
Looks like we were not able to place your request. Kindly try again later.
Journal Article
Effects of Outsider's Monitoring on Capital Structure and Corporate Growth Strategy: Evidence from a Natural Experiment
2018
Overview
Debt-ridden corporate growth and increased vulnerability was one of the causes of the 1997 financial crisis in Korea. Introduction of the outside director system has been the core part of the board reforms following the crisis. Our estimation using instruments obtained from a natural experiment illustrates that outside monitoring has (i) improved capital structure of firms even when we control for the leverage regulation effect, (ii) enhanced compliance with leverage regulation and thus reduced business risks, and (iii) reduced excessive growth and excessive investment more consistently for the top 10 largest chaebols than non-chaebol firms and smaller sized chaebol affiliates. Our results shed some light on why existing studies report the positive effect of outsiders on firm value and add value to existing agency theory by illustrating that the effect of improved governance on capital structure could be non-linear.
