earticle

영어

We examine which intra-group transactions are efficient and which are inefficient with listed firms and their affiliates. We find that a group with high industry relation had a significantly positive effect on firm performance both in large business groups and small business groups. This is consistent with the business group efficiency theory. It is also found that in case counterparts are non-listed firms, higher intra-group transaction have a negative effect on firm performance in both groups. This indicates that intragroup transaction is inefficiently used not only in large business groups, but also in small business groups if counterpart belongs to the non-listed firms. Firms of large business groups inefficiently use the intra-group transaction while firms of small and medium business groups use efficiently in the industries of SI, advertisement, logistics or construction. It empirically proves that the government willing to regulate the above four industries of which involve in intra-group transaction of large business groups is correct.