재무연구 제 권 호 (2015년 11월)
Asian Review of Financial Research, Vol., No..
pp.1~26
pp.1~26
Dumping Waste in Your Neighbor’s Backyard : Tunneling Investigation with Enhanced Identification Strategy
Dong Ryung Yang Ph.D. student at Seoul National University Business School and appreciates valuable comments from Kim, Woo-jin, the author’s dissertation advisor at Seoul National University.
This paper examines a sample of 635 real estate transactions among Korean listed firms, their related companies and controlling shareholders from 1999 to 2014. Investigating changes in market value after the transactions enables to identify whether each transaction is value enhancing or not. I find that the firms, expecting a drop in value, acquire real estate properties from controlling shareholders and dispose them expected otherwise. When firms either buy (sell) or lease a property from (to) controlling shareholders, the market value of the acquired (the disposed) property drops (increases) while the value of the leased rises. All of the findings confirm a tunneling aspect of listed firms’ real estate transactions with controlling shareholders. Market does not seem to differentiate good deals from expropriation.
Dong Ryung Yang
This paper examines a sample of 635 real estate transactions among Korean listed firms, their related companies and controlling shareholders from 1999 to 2014. Investigating changes in market value after the transactions enables to identify whether each transaction is value enhancing or not. I find that the firms, expecting a drop in value, acquire real estate properties from controlling shareholders and dispose them expected otherwise. When firms either buy (sell) or lease a property from (to) controlling shareholders, the market value of the acquired (the disposed) property drops (increases) while the value of the leased rises. All of the findings confirm a tunneling aspect of listed firms’ real estate transactions with controlling shareholders. Market does not seem to differentiate good deals from expropriation.
Tunneling,Real Estate,Related Party Transaction,International Corporate Governance
