earticle

영어

This paper provides new evidence on the relationship between internal capital markets and corporate investment by exploiting an exogenous event and an unique empirical setting. Specically, we compare the investment behavior of Korean business group (e.g., chaebol ) rms with non-chaebol Korean rms in the aftermath of the 1997 Asian nancial crisis. Korean chaebol provide a unique setting for the study of internal capital markets, since they comprise a large number of legally independent rms in several dierent industries, which are ultimately controlled by a family owner. Our empirical methodology employs a dierence-in-dierences matching estimator to ensure that chaebol rms (those in the treated group) and non-chaebol rms (those in the control group) are as similar as possible in all observable dimensions other than chaebol membership. The results show that chaebol rms invest signi cantly more than rms in the control group, in the aftermath of the crisis. This dierence in investment behavior does not hold for other, normal periods. In addition, we show that chaebol rm post-crisis investment is positively associated with variables that proxy for the availability of internal capital markets, including industry diversication within a chaebol and chaebol liquidity. Our evidence also suggests that chaebol 's internal capital markets performed ecient capital reallocation following the crisis. Chaebol rms with greater investment opportunities increased investment the most in the aftermath of the crisis, while in the control group investment opportunities were negatively related to post-crisis changes in investment. Finally, chaebol rm protability increased relative to control rms in the years following the crisis. Overall, our results suggest that Korean chaebol were able to use their internal capital markets to mitigate the negative eects of the Asian crisis on corporate investment.