The patterns of ownership structure and their characteristics in Korea conglomerates: with cases of the 30 largest Chaebols

Abstract

This study tries to classify the different patterns of ownership structure of Korean conglomerates with respect to the choice of pyramidal vs. horizontal structure and the magnitude of equity held by the controlling shareholder, namely the family. It finds four types of ownership patterns: horizontal ownership with high family stake, horizontal ownership with low family stake, pyramidal ownership with high family stake, and pyramidal ownership with low family stake. This study also attempts to identify a series of characteristic variables differentiating those different styles of ownership structures of the major Korean industrial groups. ANOVA test on those characteristic factors provides a finding that the four factors(type of business, use of non-voting shares, length of business years, and degree of business concentration) are the causal variables that influence the formation of ownership patterns, and the other four factors (fraction of inside shareholdings, debt ratio, characteristics of entrepreneur, and management style) are the resulting variables that help discern the different types of ownership structure.