Conglomerate Corporate Growth in Late Industrialization

Corporate financial structure of South Korea after Asian financial crisis: the chaebol experience

1 Background The chaebol, a South Korean form of business conglomerate, has been a key factor in the country’s economic growth. In general, a group of large-scale, family-run management enterprises is referred to as a chaebol. Jones and Sakong (1980) defined a chaebol as the Korean term for a conglomerate of many companies clustered and managed by one family-centered parent company. The charact...

Determinants of conglomerate and predatory acquisitions: evidence from the 1960s

We estimate continuous-time event-history models of the acquisition of conglomerate vs. non-conglomerate and predatory vs. friendly acquisitions among the 1962 Fortune 500 between January, 1963, and December, 1968. Our analysis of predatory acquisitions reveals that there were strong disciplinary motivations for these acquisitions in the 1960s. Q ratios were, by a large margin, the most importa...

Technological Specialization and Corporate Diversification∗

We document a trend towards fewer and more-focused conglomerates, and develop a model that explains these patterns based on increasing technological specialization. In the model, diversification adds value by allowing efficient within-firm resource reallocation. However, synergies decrease with technological specialization, leading to fewer diversified firms over time. Also, the optimal level o...

INSTITUTIONS AND CORPORATE STRATEGIES FOR REORGANIZATION: Revising theoretical models on hand from a case study of a German conglomerate in the U.S. and Germany

The Industry Life Cycle and Acquisitions and Investment: Does Firm Organization Matter?

We examine the effect of financial dependence on the acquisition and investment of singlesegment and conglomerate firms at different stages of the industry life cycle. Conglomerates and single-segment firms differ in acquisition activity more than in the level of capital expenditure across all stages. Financial dependence, a deficit in a segment’s internal financing, decreases the likelihood of...