Family ownership and Labour investment efficiency: Evidence from Korea

Kyoungwon Mo, Kyung Yun Lee, Seun Young Park

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

This paper examines whether founding-family ownership affects firms’ labour investment efficiency. By analysing public Korean companies from 2001 to 2018, we found that family firms are more efficient than non-family firms in regard to labour investment. The results show that family firms can achieve greater efficiency in labour investment by avoiding over-firing issues, thereby reducing underinvestment in employment problems. Additionally, we found that family firms make more efficient labour-related decisions with greater external financing. Overall, the results suggest that family firms’ long-term perspective enables them to maintain optimal labour levels.

Original languageEnglish
Pages (from-to)1073-1078
Number of pages6
JournalApplied Economics Letters
Volume29
Issue number12
DOIs
StatePublished - 2022

Keywords

  • family firms
  • family ownership
  • investment efficiency
  • labour investment
  • Ownership structure

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