한국기업의 대리인비용과 기업가치 = 외국인 지분의 역할

다국어 초록 (Multilingual Abstract)

We examine the relationship of foreign investors‘ equity ownership, agency costs, and firm value using 4,721 firm-year observations of industrial firms listed in the Korea Stock Exchange between 1992 and 2001. A recent increase in foreign ownership may be viewed as a formation of competing block holders against domestic large block holders and owner managers. Foreign ownership of Korean firms has been very small and was not likely to affect firm`s decision until the Korean government opens the capital markets to the foreign investors in 1992. Since then, foreign ownership increases gradually and foreign institutional investors become more active investors after all the foreign investors` ownership limitation is lifted in 1998. For instance, market capitalization owned by foreigners is 36.6% of total market capitalization in year 2001. In the same year, Korea Stock Exchange reports that foreigners own 43.16% of top 10 chaebol-affiliated firms in Korea. Because of increased ownership stake, foreign investors are more likeiy to become long-term and active investors as well as independent of the ultimate owners of the firm so that the agency costs and firm value are likely to be determined by foreign ownership. However, studies examining the role of foreign investors with regard to agency costs have not been sufficiently documented yet. This paper investigates the relation between foreign ownership and agency costs due to managerial moral hazard. Monitoring role of foreign investors would be more effective and the managerial agency costs would decrease as the foreign investors’ equity ownership increases. An example of agency costs is the managerial perquisite consumption that depends on managerial discretion. We use the entertainment expenses per sales as the proxy for agency costs since these kinds of expenses depend on managerial discretion and can be regarded as lavish “perks” consumption rather than as investment for future growth. Yafeh and Yosha(1996) document that discretionary spending such as advertising, research and development, and entertainment expenses decreases as ownership by large shareholders increases. Morck and Nakamura(1999) further document that entertainment spending falls as cash flow falls among the non-bank group firms due to closer bank monitoring. In addition, if there is a relation between foreign ownership and agency costs, foreign ownership may affect firm value, too. Thus examining the monitoring role of foreign shareholders and the exploring the relation between foreign ownership and firm value is clearly an interesting research topic. However, there are very limited researches examining the relation between firm value and foreign ownership. We believe that it is because that foreign ownership is minimal in most developed countries as well as in most developing countries. To our knowledge, the only empirical paper on the relation between firm value and foreign ownership is Khanna and Palepu(1999) which examine the relation for Indian firms. We use Tobin`s q ratio as a proxy for firm value. We find evidence supporting that to some extent foreign investors in Korea efficiently monitor management and reduce entertainment-like-expenses. The findings also suggest that the relationship between firm value measured by Tobin`s Q and foreign ownership will be positively related. Consistent with the conjecture, we find evidence supporting the positive linear relation between firm value and the foreign investors` equity ownership. Our findings imply that inducing foreign investors to hold equity ownership may improve firm value by reducing agency costs.

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