국제다각화, 외국인투자자가 기업가치에 미치는 영향에 대한 실증연구

An Empirical Study for Global Diversification, Foreign Investors and Firm Value

This paper examines two research questions. First question relates to the association between global diversification and the firm value and the second question relates to the foreign investors' monitoring effect on the association between global diversification and the firm value. To date, the empirical evidence on the valuation effects of global diversification has produced mixed findings. This paper investigates whether global diversification can actually decrease firm value, using wide spread proxy, tobin's Q. In addition, this paper conjectures that if global diversification actually reduce firm value by managerial opportunism of global diversification, I further examine whether this relation varies with the external monitoring mechanisms such as foreign investors. The empirical result is as follows. Using from 2001 to 2010 Korean firms' annual observations, global diversification is, on average, negatively (-) associated with the firm value. As expected from above prediction, investors take value discount on global diversification because of managerial opportunism Another key findings of this study is the significantly different valuation effects of global diversification by Korean firms with foreign investors. This paper has several contributions to the prior literature. First, this is the first study to examine, global diversification, foreign investors and firm value in Korea. Prior literatures just focus on global diversification and firm value in 1990s or focusing on developed countries such as U.S. (Denis et al., 2002; Gande et al., 2009) or corporate diversification and firm value in Korea. This paper intend to fill this gap by examining global diversification, foreign investors affect the market value of Korean firms using recent data from 2001 to 2010 to examine recent trend toward global diversification with moderating role in foreign investors.