How Can Non-Chaebol Companies Thrive in the Chaebol Economy?

Nam Kuk Kim,Sanjit Sengupta,Dong-jae Kim 한국마케팅과학회 2009 마케팅과학연구 Vol.19 No.3

While existing literature has focused extensively on the strengths and weaknesses of the Chaebol and their ownership and governance, there have been few studies of Korean non-Chaebol firms. However, Lee, Lee and Pennings (2001) did not specifically investigate the competitive strategies that non-Chaebol firms use to survive against the Chaebol in the domestic Korean Market. The motivation of this paper is to document, through four exploratory case studies, the successful competitive strategies of non-Chaebol Korean companies against the Chaebol and then offer some propositions that may be useful to other. entrepreneurial firms as well as public policy makers. Competition and cooperation as conceptualized by product similarity and cooperative inter-firm relationship respectively, are major dimensions of firm-level marketing strategy. From these two dimensions, wedevelop the following 2 × 2 matrix, with 4 types of competitive strategies for non-Chaebol companies against the Chaebol (Fig. 1.). The non-Chaebol firm in Cell 1 has a "me-too" product for the low-end market while conceding the gigh-end market to a Chaebol. In Cell 2, the non-Chaebol firm partners with a Chaebol company, either as a supplier or complementor. In Cell 3, the non-Chaebol firm engages in direct competition with a chaebol. In Cell 4, the non-Chaebol firm targets an unserved part of the market with an innovative product or service. The four selected cases such as E-Rae Electronics Industry Company (Co-exister), Intops (Supplier), Pantech (Competitor) and Humax (Niche Player) are analyzed to provide each strategy with richer insights. Following propositions are generated based upon our conceptual framework: Proposition 1: Non-Chaebol firms that have a cooperative relationship with a Chaebol will perform that have a cooperative relationship with a Chaebol will perform better than firms that do not. Proposition 1a: Co-existers will perform better than Competitors. Proposition 1b: Partners (suppliers or complementers) will perform better than Niche players. Proposition 2: Firms that have no product similarity with a Chaebol will perform better than firms that have product similarity. Proposition 2a: Partners (suppliers or complementors) will perform better than Co-existers. Proposition 2b: Niche players will perform better than Competitors. Proposition 3: Niche players should perform better than Co-existers. Proposition 4: Performance can be rank-ordered in descending order as Partners, Niche Players, Co-existers, Competitors. A team of experts was constituted to categorize each of these 216 non-Chaebol companies into one of the 4 cells in our typology. Simple Analysis of Variance (ANOVA) in SPSS statistical software was used to test our propositions. Overall findings are that it is vetter to have a cooperative relationship with a Chaebol and to offer products or services differentiated from a Chaebol. It is clear that the only profitable strategy, on average, to compete against the Chaenol is to be a partner (supplier or complementor). Competing head on with a Chaebol company is a costly strategy not likely to pay off for a non-Chaebol firm. Strategies to avoid headon competition with the Chaenol by serving niche markets with differentiated products or by serving the low-end of the market ignored by the Chaebol are better survival strategies. This paper illustrates that there are ways in which small and medium Korean non-Chaebol firms can thrive in a Chaebol environment, though not without risks. Using different combinations of competition and cooperation firms may choose particular positions along the product similarity and cooperative relationfhip dimensions to develop their competitive strategies -co-exister, competitor, partner, niche player. Based on our exploratory case-study analysis, partner seems to be the best strategy for non-Chaebol firms while competitor appears to be the most risky one. Niche players and co-existers have int ?有的文??泛的?注??以及他?的所有?和支配?的?点和弱点, 但是?乎?有?于??非??公司的硏究。 然而, Lee, Lee and Pennings (2001) ??有特別的探?在???內市?非??公司?求生存而?抗??公司的具有??力的?略。 本文的硏究?机是通?四?探索性案例的硏究, ??非??公司如何?抗??公司的成功的???略和提出的建?可能??其他的企?以及公共政策制定者有所?助。 ??品相似性和公司內的合作?係分別定??爭和合作的?念。 ????方面, 我們開?了以下2 × 2矩?, ?非財閥公司?抗財閥公司提供四?競爭??。 在小?2, 非財閥公司以供?商或互?企?的身?成?財閥公司的合?人。 在小?3, 非財閥企??事?財閥直接競爭人。 在小?4, 非財閥企?的目?, 以?品?新或服???目?市場空白點。 我們選?的4個公司分別是E-Rae電子企?公司(共存方), Intops(供?商), Pantech(競爭?手)和Humax(小?市場成?)。 通?分析?4個案例, 相互提供更?富的洞察力戰略。 基于我們的?念?架, 提出下列假? : 假?1 : ?財閥公司有合作?係的非財閥公司比?有合作?系的公司表現得更好。 假?1a : 共存方?比競爭方表現得更好。 假?1b : 合?方?比小?市場成?表現得更好。 假?2 : 與財閥公司的?品?有相似性的公司比有相似性的公司表現得要更好。 假?2a : 合?方比共存放表現得更好 假?2b : 小衆市場成員會比競爭方表現得更好。 假?3 : 小衆市場成員?比共存方表現得更好。 假?4 : 按?效的降序排列依次是合作者, 小衆市場成員, 共存方, 競爭方。 一組?家按照我?4組的分?把216家非財閥公司分?。 用SPSS???件中的??方差分析???假?。 ?果?現, 與財閥公司有合作關係的以及提供與財閥公司不同的産品或服?比?好。 ?明?的一點是, 平均來說, 若要?抗財閥公司中?利, 其戰略是成?合?人(供?商或?成部分)。 直接與財閥公司硬?硬的競爭是要付出?高代价的?略, 而??代价不市非財閥公司能??得起的。 避免與財閥公司迎面競爭的戰略是用不同的産品服?于利己市場, 或是服務于被財閥公司忽?掉的低端市場。 這些戰略是比?好的生存戰略。 本文說明在財閥?境中, 韓國的中小型非財閥公司有一些方法可以生存, ?管不是?有??。 根据不同的競爭組合, 合作的公司可以根据産品相似性以及合作關係的?度來選?定位?而制定自己的競爭戰略。 例如共存方, 競爭對手, 合?人, 小衆市場成員。 根据我?的探索性案例分析, 合?人對非財閥公司來說可能是最好的戰略, 而競爭者?是有?大風?的。 小衆市場成員和共存方?于中?, 但前者比后者要好。 ?多中小型企?的管理者只是用??的, 不是合作就是競爭的?點來??市場的??者-典型的就是財閥。 結果, ?多非財閥公司?成被?的合作者或被自己的競爭對手財閥所??。 事?上, 合作和競爭?不是互相排斥的, 是可以同?被追求的。 正如本文所建?的, 非財閥公司可以根据他?的?境, 內部?源和能力?活的選?合作和競爭。

Financial Policies between Chaebol and Non-chaebol Firms

류성희 한국경영교육학회 2015 경영교육연구 Vol.30 No.6

In this research, we investigate whether chaebol affiliations have a different financial policy compared with non-chaebol firms and a big-firm group(a group of firms that has the same average firm size with the chaebol-firm group, and does not belong to chaebol group), in debt level, cash-holding level, and investment decision policies. We use 123 chaebol affiliations out of 427 firms from 9 industries from the KOSPI market between 2001 and 2013. Our results indicate that 9 variables out of 10 show significant differences in terms of the directions and magnitudes of the coefficients of independent variables between chaebol and non-chaebol firms for debt level policy. According to our descriptive statistics, chaebol affiliations have a larger sized firm, lower bankruptcy probability and higher PER than non-chaebol firms. In other words, firms in the chaebol-firm group could have low fiancing costs with low bankruptcy probability and high stock prices. For the cash-holding policy, 4 variables show differences;and for investment policy, only 1 variable shows a significant difference between chaebol and non-chaebol firms. In this paper, we use regression models and the T-test to confirm the existence of differences in financial polices, mainly between chaebol and non-chaebol firms. As we use panel data, we use GMM, and system GMM estimators when using regression model analyses, because these estimators do not require the normal distribution of error term. When comparing the coefficients from two different regression estimators, by using the T-test, we find more compelling evidence that chaebol and non-chaebol firms have different financial policies than prior research. This is because, by using the T-test, we can obtain more solid evidence of whether firms’ financial policies are influenced by firms’ chaebol group membership; and by using this method, we often find inconsistent results with previous research. We believe that a lot of previous research should be revised using our method, as our T-test often disagrees with the results found by previous research that only use simple regression estimators. In this paper, we have several limitations. First, when using the sub-sample of big-firm group, there are not enough sample observations to investigate and to get more reliable results. Second, we do not include the probability of the fact that firms’ debt levels, cash levels and investment decisions could be affected by firms’ characteristics that occur different time periods. Third, in this paper, we only use data from the KOSPI market. Therefore, our research can not represent whole listed firms in Korea. From this paper, we learn that firms in our three sub-groups, chaebol, non-chaebol and big-firm groups, have different financial policies in line with their different financial characteristics. This research likewise provide the fact that how chaebol affiliated firms enjoy their chaebol group membership when they use debt and cash.

The Management Characteristics of Korean Chaebols vs. non-Chaebols : Differences in Leverage and Its Ramifications: Myth or Reality?

Hanjoon Kim,Paul D. Berger 한국재무학회 2009 한국재무학회 학술대회 Vol.2009 No.05

The study investigates two prolonged controversial issues concerning Korean Chaebols vs. non- Chaebols. The Korean Chaebol can be thought of, in a macro sense, as similar to the Japanese Keiretsu, although there are several differences which are noted in the paper. One of the issues investigated is whether firms belonging to the Chaebol in Korea have different market-value-based debt ratios (i.e., higher “leverage”) than their counterparts not belonging to the Chaebol. If this is so, there are several managerial implications. Results indicate that, for the period studied, firms in the chaebol did have a higher mean leverage than their counterparts. The other issue addressed used logistic regression analysis to determine that firms belonging to the chaebol appeared to possess different levels of the following characteristics in comparison with firms not belonging to the chaebol: larger size measured by total sales, higher sales growth rate, lower profitability, and lower business risk (although the latter difference was not statistically significant, only directional). We focus on these results and their managerial implications. Few studies have focused systematically on these issues. Domestic policy-makers implementing managerial policies in Korea or many other developing nations may take into account the results of this study to prevent or minimize unanticipated mismanagement leading to financial turmoil.

韓國Chaebol(財閥)システムの「功」と「罪」

金榮來 韓日經商學會 2001 韓日經商論集 Vol.22 No.-

The purpose of this paper is to promote Chaebol reform which is necessary for the future of Korean economy by presenting the contributions of Korean Chaebol to economic development of Korea and limitation of Korean Chaebol system disclosed in Asian Financial Crisis. Korea has no other business organization which can replace the role of Chaebol at the present time. Therefore, we need to find measures to make Chaebol function in affirmative side by Chaebol Reform rather than disorganizing Chaebol, especially in the economic environment of Korea where market system does not work properly. Chaebol Reform includes transparency in management, separation of management and ownership, improvements of financial structures, concentration on core competence, solidification of responsibility in management, etc. Key words : Chaebol, Reform, Effectiveness of Chaebol system

재벌기업의 연구개발투자가 더 높은성과를 달성하는가?

권세원,김범준,최세라,이문영 정보통신정책학회 2018 정보통신정책연구 Vol.25 No.2

본 연구는 국내 재벌기업의 연구개발(R&D) 투자가 차별적인 경제적 성과를 달성하는지 분석하였다. 선행연구에 따르면, 재벌기업은 대주주와 소액주주 간 대리인 문제로 인하여 경영성과가 낮다는 연구결과와 반대로 재벌기업들은 기업집단 내 자원을 공유하여 효율적으로 활용함으로써 오히려 경영성과 높다는 상반된 연구결과가 존재한다. 본 연구에서는 재벌기업의 연구개발투자가 더 높은 회계이익과 가치 관련성을 달성하는지 실증 분석하였다. 연구결과, 비재벌기업과 비교하여 재벌기업의 연구개발비 투자는 더 높은 회계이익을 달성할 뿐만 아니라 높은 가치 관련성을 달성한다는 점을 발견하였다. 또한 재벌그룹 내에서 지배구조의 중심역할을 담당하는 중핵기업(central firm)일수록 연구개발비 투자로 인한 회계이익과 주가관련성이 부정적인 영향을 미친다는 점을 발견하였다. 이러한 연구결과는 재벌기업이 연구개발비를 효율적으로 활용하여 더 높은 경제적 효과를 달성하지만, 재벌그룹 내에서 높은 대리인 비용은 연구개발비 투자성과에 부정적인 영향을 미친다고 해석할 수 있다. 본 연구는 재벌기업이 연구개발비 성과창출에 미치는 영향을 보임으로 회계학분야 연구개발비 관련 문헌에 공헌한다. This study investigates the economic effects of research and development (R&D) investment at Korean chaebol firms. The study contributes to existing studies of R&D investment in the accounting literature by investigating the R&D investment performance of chaebol firms and the effect of agency problems within chaebols on R&D investment performance. Prior literature has espoused two controversial arguments regarding the performance of chaebol firms. On the one hand, the economic performance at chaebol firms is expected to be lower than at non-chaebol firms due to an agency problem between major shareholders and minority shareholders at chaebol firms. On the other hand, chaebol firms may achieve higher economic performance because of efficiencies in resource sharing within chaebol groups. The objective of this study is to examine R&D investment performance of chaebol versus non-chaebol firms. We find that R&D investment at chaebol firms results in higher accounting performance and value-relevance than at non-chaebol firms. We also show that R&D investment of central firms, those playing a key role in the formation of a chaebol-group structure, achieves relatively low accounting performance and value relevance. Overall, these empirical results imply that chaebol firms utilize R&D investment more efficiently, with higher economic performance, compared to non-chaebol companies, but agency problems within chaebol groups, measured by firms’ centrality to their chaebol group, lower the performance of R&D investment.

韓國 財閥의 經營史的 硏究

Kim Sung Soo(金聖壽) 한국경영사학회 1998 經營史學 Vol.18 No.-

The purpose of this study is to investigate the Business Historical Study on the Korean Big Business Group(chaebol’s). The reform of Korean Big Business has significance in the developmental liquidation of Korean chaebol’s. In the past April 15. 1998 the Korean Government announced the 30th event of large Big Business Group Saving Troubles Business administration result in order to disintegrate those ones with no efficient management result. Instead help Big Business Group prosper and become extremely successful. Through this study, the Re-illumination of todays Korean’s chaebol’s can be seen: the developmental liquidation of chaebol’s and instead increasing Big Group’s planning through Business re structuring. Therefore, with respect to the industrial development. The Business Historical study in Korean chaebol’s can be divied in to six major periods: the first period(1920-1945) can be characterized as the quickening period of Korean enterprises under the Janpanese colonial rule. The second period(1945-1960) was the period of creation since the establishment and construction period till the post war restoration stipulated. The third period (1961-1971) was the period of take-off the modernization of industrial and acceleration of self-sustaining economy. The fourth period(1972-1979) was the period of rapid growth for the purpose of build of export oriented heavy and chemical industries, promotion of science and management technology and increase in productivity of Korean Business Group and chaebol’s. The fifth period (1980-1987) was the period of turning point in the stabilized growth, through the stabilization, efficiency, and balance, completion of the maximization of investment efficiency in the Big Business Group’s. The six period (1988-1999) was the period of re structuring in the Korean chaebol’s for the purpose of Re-illumination in the Big Business Group’s and Korean chaebol’s trouble problems begin getting controled and regulated by releasement in the system. In this period of time, the government dependence style of economic policy has been converted to the private dependence style of economic policy. This has been the Korean Big Business Group innovation, specially the overcoming of the IMF system. What has been discussed on the Business Historical characteristics of Korean Big Business Group(chaebol’s) can be summarized as follows: First, the life cycle of Korean chaebol’s are always in a stage of rise and fall, and maintain a progress attitude. The 100 enterprised that were established in the year 1965. had decrease to 16 enterprises after 30 year later, 1995. These native capital of chaebol’s cooperating with the political power authorities, become the vicious financial structure of irrational financial cliques. Second, Borrowed management structure and irrational dependence mode of political power. privileged loans and Government Business Collusion, result of bank-related irregularities. Third, vicious financial structure and the fragmentations of the financial management as well as fall of international credit degree. Fourth, the drop of transparency on the management of Big Business Group and tile hereditary transmit from generation to generation of irregular method in the Korean chaebol’s. After all, these Korean Big Business Group’s troubles crisis have been faced on today’s IMF problem: which has greatly thrown an impact and become to be topic to discuss and criticize about.

재벌의 분할승계와 경제력집중의 변화

최정표(Jeong-Pyo Choi) 한국경영사학회 2011 經營史學 Vol.58 No.-

한국 재벌사에서 최근 두 가지의 큰 변화가 있었다. 하나는 1997년의 외환위기 전후로 많은 재벌이 한꺼번에 도산한 일이고, 다른 하나는 대부분의 재벌에서 2, 3세로의 상속이 있었으며 이 과정에서 재벌분할이 일어났다는 점이다. 이 두 가지 현상은 거의 비슷한 시기에 일어났는데, 이 때 분할 승계된 친족재벌이 도산한 재벌들의 자리를 메꾸어 나가는 현상이 나타났다. 즉 기존 재벌에서 분할된 친족재벌들이 30대 재벌 내에 많이 자리 잡았다. 본 연구는 재벌구도의 이런 변화가 재벌에 의한 경제력집중 현상에 어떤 변화를 주었는지 분석하였다. 분석 결과에 의하면 첫째, 외환위기시에 경제력집중이 정점에 이르고 그 이후에는 경제력집중이 점점 완화되는 추세를 보이고 있었다. 둘째, 친족재벌의 출현은 가문에 의한 경제력집중 현상을 야기 시키고 경제력집중의 완화 추세를 둔화시키고 있었다. 셋째, 재벌의 연쇄도산과 친족재벌의 출현은 일시적으로 재벌 판도를 뒤흔든 효과는 있었으나 그 이후에는 재벌 간의 상대적 위상은 다시 안정화되고 있었다. 요약 정리하면 외환위기 이후의 재벌 개혁과 재벌의 분할승계는 총괄집중률의 하락 추세에도 불구하고 한국 경제의 재벌지배현상을 바꾸어 놓지는 못하고 있었다. There were two big changes recently in the history of Korean chaebols. One is the simultaneous bankruptcy of many chaebols in the 1997 financial crisis, and the other is the partitioning of several chaebols in the process of succession. These happened in the same periods, and the divided chaebols tended to replace the previous position of the bankrupt chaebols. Therefore, many chaebols separated from the same family appeared in the list of top 30 chaebols. Chaebols of the same family could be cooperative rather than competitive. Taking into account these factors, economic concentration could become higher. In trend, concentration rato turned to be declining smoothly after the financial crisis. The appearance of new chaebols of the same family, however, delayed the drop in concentration ratio. In addition, besides several years of the intensive chaebol reforms, relative position of individual chaebols seem to be stabilized again. This indicates that chaebols are again safely entrenched, and competition among them could become loose again.

The Effect of IFRS on Conservatism and Value Relevance of the Chaebol

( Yong Shik Kim ),( Sun A Kang ) 한국회계학회 2014 회계저널 Vol.23 No.3

We investigate the effect of IFRS on the relationship between the chaebol and conservatism, and the effect of this relationship on the value relevance of the chaebol. We find that the adoption of IFRS does not influence the conditional conservatism in non-chaebol firms, but it weakens the conditional conservatism in chaebol firms relatively. We also find that the unconditional conservatism of chaebol firms is greater than that of non-chaebol firms both before and after IFRS adoption. Finally, we document that the influence of the chaebol`s earnings on the value relevance decreases significantly, but the influence of the chaebol`s book value on VR does not change significantly after IFRS adoption. Consequently, the influence of the chaebol`s earnings on the value relevance decreases as the conditional conservatism of the chaebol declines after IFRS adoption, while the influence of the chaebol`s book value on the value relevance does not change as high levels of the unconditional conservatism in chaebol firms persists both before and after IFRS adoption.

국가주도에서 기업주도로

국민호(Minho Kuk) 한국인문사회과학회 2011 현상과 인식 Vol.35 No.3

재벌과 국가와의 관계는 오랜 역사를 갖고 있다. 사실 한국의 재벌은 1960년대 박정희 대통령의 강력한 의지에 의해 창조되었다. 박정희 정부는 규모의 경제를 실현하기 위해 소수 경쟁력 있는 대기업을 육성하는 쪽으로 모든 자본과 노력을 집중하였다. 재벌들은 1970년대 중화학공업 발전 과정에서 거대한 자본을 집중함으로써 크게 변모되었다. 이 과정에서, 국가와 재벌 간의 관계는 더욱 친밀하고 협조적으로 변했다. 그러나 1970년대 말까지 국가는 재벌의 상급 파트너로 재벌들의 정책 결정에 대한 주도권을 쥐고 있었다. 1980년대에 이르러, 한국은 더욱 깊숙이 세계경제에 통합되었다. 이런 과정을 통해 재벌은 정부로부터 점차 정책 결정에 대한 독자적인 주도권을 확보해갔으며 상대적으로 정부는 경제 결정과정에서 더 이상 전능한 상급 파트너가 될 수 없었다. 1990년대 금융자유화와 함께 점증하는 재벌들의 경제력은 금융개혁을 재벌에게 유리하게 만들거나 아니면 재벌의 이익을 대변하도록 만들었다. 이 과정에서 정부는 재벌들의 국제 경쟁력 강화 명목으로 재벌들이 다양한 형태의 제2 금융회사들을 소유할 수 있도록 허용했다. 제2 금융권의 활성화는 재벌들이 정부의 금융 독점으로부터 독립할 수 있는 결정적 계기가 되었다. 1990년대 중반에 이르러 정부는 재벌들의 자본 획득과 투자 결정에 대한 통제권을 대부분 상실했다. 동아시아 외환위기 속에서 집권한 김대중 정부는 IMF 와의 협조 속에서 강력한 국가의 역할을 소생시켜 국가주도로 재벌을 개혁하려고 하였다. 그러나 그러한 노력은 잘 작동하지 않았다. 우선 재벌들이 정부의 명령에 따르지 않았고, 정부 자신도 당시 경제 위기 국면에서 이들 재벌들의 과잉채무 문제의 해결을 도와주지 않을 수 없었다. 부활된 국가의 재벌 통제는 시간이 지날수록 점차 약화되었다. 국가주도로 급속한 산업화를 이룩한 발전국가적 특성과 경로의존성에 의해 경제가 위기에 처할 때마다 국가 주도적 경제적 역할이 소생되고 있으나 상대적으로 국가 경제에서 재벌의 위상과 역할은 더욱 강화되고 있으며 국가의 경제 간섭은 직접적 기업 통제에서 좀 더 유연하고 비공식적인 방향으로 나아가고 있다. 사회가 민주화되고 경제가 국제화될수록 경제발전의 주도권은 국가에서 기업(재벌)으로 이동하고 있다. The relationship between chaebols and the Korean state has a long history. Korean chaebols were created by the President Park in the 1960s. Chaebols were subject to and comply with the government’s development plan. They were the junior partner in relations with the government. The development plan of heavy and chemical industries (HCI) in the early 1970s totally transformed the chabols’s financial structure. It caused the massive capital concentration of chaebols. In the process, the relationships between government and chaebols became more intimate and cooperative. But government was still the senior partner in their relationships. In the 1980s, Korea became more deeply integrated in the world economy. In the process chaebols became more independent in their economic activities and the government could no more be the omnipotent senior partner in the economic decision makings. The growing economic power of chaebols made the financial reform to be beneficial to chaebols or reflect the interests of chaebols. The nonbanking financial institutions(NBFIs) allowed chaebols to be independent from the government-controlled bank credits. Since the early 1990s, the government had lost much of the power to control the chaebols’ investment decisions. In the process the government did not develop any effective inspection mechanism to check the chaebols’ financial investment. Rather, the bureaucracy were more cooperative and had been increasingly co-opted by chaebols. Kim Dae-jung government tried to reform chaebol structure with the help of IMF during the period of the foreign exchange crisis in Korea. But government’s reform efforts did not work so well. Chaebols did not follow the government’s order, and the government could not but help the insolvent chaebols to get rid of the economic problems. Nowadays chaebols grew up to be an international superpower that can not controlled by the government. Chaebols are now no more the target to be dismantled. Chaebols are now working as leading TNCs (trans-national corporations) in the world market economy. Nevertheless, the legacy of developmental state and path dependency of the state-led economic development is still alive and leads the government to intervene in the economic activities in the time of national economic crisis.

The Effect of IFRS on Conservatism and Value Relevance of the Chaebol

김용식,강선아 한국회계학회 2014 회계저널 Vol.23 No.3

We investigate the effect of IFRS on the relationship between the chaebol and conservatism, and the effect of this relationship on the value relevance of the chaebol. We find that the adoption of IFRS does not influence the conditional conservatism in non-chaebol firms, but it weakens the conditional conservatism in chaebol firms relatively. We also find that the unconditional conservatism of chaebol firms is greater than that of non-chaebol firms both before and after IFRS adoption. Finally, we document that the influence of the chaebol’s earnings on the value relevance decreases significantly, but the influence of the chaebol’s book value on VR does not change significantly after IFRS adoption. Consequently, the influence of the chaebol’s earnings on the value relevance decreases as the conditional conservatism of the chaebol declines after IFRS adoption, while the influence of the chaebol’s book value on the value relevance does not change as high levels of the unconditional conservatism in chaebol firms persists both before and after IFRS adoption.