Korean Corporate Ownership Structures, Agency Costs, and Social Responsibility Practices

This study principally entails an examination of the relationship between ownership structure and CSR practices. First, our results demonstrate that family firms tend to be passive in their CSR activities, which is the first to address this topic. Second, our findings imply that a national pension as a blockholder exerts pressure on management to exercise CSR in an effort to enhance the value of firm. Third, the results indicate that in case involving foreign ownership as a blockholder, greater pressure is exerted on management to exercise CSR. The results of our additional test demonstrate that firms with a higher proportion of a controlling shareholder in family firms tend to have less robust CSR practices. This results also indicate that firms with a higher proportion of a national pension blockholder tend to engage in CSR practices. Our findings also suggest that firms with a higher proportion of a foreign blockholder tend to exhibit more robust CSR practices. In Korea, these findings regarding the effect of ownership on CSR practices may prove useful to firms’ CSR policymakers and to regulators. In future studies, it will be necessary to extend this study’s protocol to the dimensions of comparative analysis among countries.