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Research report

Investors' perception of business group membership during an economic crisis : Evidence from the COVID-19 pandemic

Université de Fribourg BP2-STS

    01.10.2020

51

Business groups
financial crisis
COVID-19
internal capital market
Korea
English This paper examines how investors perceive business group membership in Korea during the COVID-19 pandemic. Stock price performance analysis reveals evidence of a time-varying and heterogeneous value of affiliation: investors discount business group affiliation during a market collapse, but are willing to pay a premium for affiliation during market recovery. Overall, this pattern is more pronounced for financially weak affiliates and large business groups. The results further show that business group membership alleviates investors' concerns regarding financial flexibility, highlighting the role of internal capital markets as a substitute for external finance.
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Faculty
Faculté des sciences économiques et sociales et du management
Language
  • English
Classification
Economics
Series statement
  • Working Papers SES ; 524
License
License undefined
Identifiers
  • RERO DOC 333178
Persistent URL
https://folia.unifr.ch/global/documents/309578
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