The Very Dark Side of Internal Capital Markets: Evidence from Diversified Business Groups in Korea

This paper examines the capital allocation within Korean chaebol firms during the period from 1991 to 2000. We find strong evidence that, during the pre-Asian financial crisis period in the early 1990's, poorly performing firms with less investment opportunities invest more than well-performing firms with better growth opportunities. We also find the evidence of cross-subsidization among firms in the same chaebol group during the pre-crisis period. It appears that the existence of the "dark" side of internal capital markets explains most part of this striking phenomenon where "tunneling" practice has been common during the pre-crisis period. However, the inefficient capital allocation seems to disappear after the crisis as banks gain more power and market disciplines inefficient chaebol firms.

Information Technology Investment and National Productivity

Using the country-level information technology (IT) expenditures and productivity data for the period from 1992 to 2000, we estimate production function augmented with IT capital stock in the first-difference form. As discussed in prior studies, we confirm that IT expenditures have significant positive effects on national productivity growth. The effects of IT expenditure on productivity growth hold for a short-term (1-year) as well as for a longer-term (4-year and 8-year). Using two theory-based measures of IT maturity, we find that the IT maturity is an important factor that explains the relationship between IT expenditures and national productivity. In addition, we find that the effect of IT expenditures is even higher when the countries are at the mature stage of IT expenditures. Furthermore, we present evidence that IT externalities improve the effect of IT expenditures on productivity growth

Do Main Banks Extract Rents from their Client Firms? Evidence from Korean Chaebol

Using a unique data set on all industrial firms listed on Korea Stock Exchange and KOSDAQ stock market from 1991 to 2000, we find that cash ratios for chaebol firms are lower than for non-chaebol firms. Controlling for access to the bond market and financial services arms does not change this result. We do however find that there is a shift in the degree of bank power over the last decade. Consistent with the main bank monopoly hypothesis during the corporate restructuring process after the financial crisis in 1997, the interest differential charged to chaebol firms is significantly higher than the earlier period, suggesting extraction of rents against chaebol client firms by main banks.Cash holdings, bank power, rent extraction, Korean chaebol

Value Discount of Business Groups Surrounding the Asia Financial Crisis: Evidence from Korean Chaebols

Asian Financial Crisis, Business Group, Chaebol, Diversification, Firm Value

AD-YOLO: You Look ONly Once in Training Multiple Sound Event Localization and Detection

Sound event localization and detection (SELD) combines the identification of sound events with the corresponding directions of arrival (DOA). Recently, event-oriented track output formats have been adopted to solve this problem; however, they still have limited generalization toward real-world problems in an unknown polyphony environment. To address the issue, we proposed an angular-distance-based multiple SELD (AD-YOLO), which is an adaptation of the "You Look Only Once" algorithm for SELD. The AD-YOLO format allows the model to learn sound occurrences location-sensitively by assigning class responsibility to DOA predictions. Hence, the format enables the model to handle the polyphony problem, regardless of the number of sound overlaps. We evaluated AD-YOLO on DCASE 2020-2022 challenge Task 3 datasets using four SELD objective metrics. The experimental results show that AD-YOLO achieved outstanding performance overall and also accomplished robustness in class-homogeneous polyphony environments.Comment: 5 pages, 3 figures, accepted for publication in IEEE ICASSP 202

Family Control, Product Market Competition and Firm Performance

In this paper, we try to determine the effect of the presence of family shareholders on company performance in the absence of external corporate governance. Our empirical results using Anderson et al. (2009, 2012)s family firm data suggests that family firms exhibit superior firm performance relative to nonfamily firms when the level of product market competition is weak, suggesting that the family control is an effective internal corporate governance mechanism that can compensate for weak external corporate governance. Furthermore, a family firms performance results in being superior to nonfamily firms performance in weak competitive markets, regardless of whether the CEO of a family firm is a founder, heir or professional manager. These findings suggest that the family control is an effective organizational structure in mitigating agency problems and enhancing firm performance when external corporate governance is weak

International Comparison of Japanese and Korean Banking Efficiency

This study investigates the pattern of changes in efficiency and productivity of the banking sectors at the firm level for the period of 1991-2005 using output distance function and applying the one-stage stochastic frontier approach. This study pools Japanese and Korean bank dataset to effectively compare the pattern of change between Japanese and Korean banking efficiency. Our results indicate that estimates of technical progress, technical efficiency, and total factor productivity (TFP) depend on the viewpoint about the true function of bank: intermediation approach, value-added approach, or operating approach. While intermediation approach results imply that the productivity has overall declined over the sample period for the both country banks, operating approach results are mixed for the two countries. Value-added approach indicates positive TFP growth for the both countries. In most cases, the levels of technical efficiency were further behind the technological frontier for the Korean banks than for the Japanese banks