Internal capital markets, corporate investment, and the COVID-19 pandemic: Evidence from Korean business groups
International Review of Financial Analysis
; 80:11, 2022.
Article
in English
| Web of Science | ID: covidwho-1851325
ABSTRACT
This paper examines whether the investment of Korean business group ("chaebol") affiliated firms behaved differently from that of non-chaebol firms in response to the COVID-19 outbreak. I show that chaebol firms cut back investment to a lesser degree than similar non-chaebol firms. Chaebol firms with higher-than-industry-median market-to-book ratios invested more and experienced less decline in their stock prices, while I do not find such relationships for non-chaebol firms. This paper provides evidence that chaebol internal capital markets helped mitigate the negative effects of the pandemic on firm investment and value.
Full text:
Available
Collection:
Databases of international organizations
Database:
Web of Science
Type of study:
Randomized controlled trials
Language:
English
Journal:
International Review of Financial Analysis
Year:
2022
Document Type:
Article
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