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- Title
STRATEGY, STRUCTURE AND PERFORMANCE OF KOREAN BUSINESS GROUPS: A TRANSACTIONS COST APPROACH.
- Authors
Sea Jin Chang; Unghwan Choi
- Abstract
We use the transactions cost approach to analyze the diversification strategy and the resulting structure chosen by Korean business groups to overcome market imperfections prevalent in developing countries. Business groups which have multidivisional structure are thought to show superior economic performance because such structure reduces transactions costs arising from organizational failure. Also, major Korean business groups have a "relational structure", showing both vertical integration and the characteristics of the conglomerate. We modified the model of Caves and Uekusa [1976] used for Japan to obtain the empirical result that group affiliated firms show superior economic performance.
- Subjects
KOREA; TRANSACTION costs; DIVERSIFICATION in industry; MARKETING strategy; BUSINESS enterprises; ORGANIZATIONAL structure; PERFORMANCE
- Publication
Journal of Industrial Economics, 1988, Vol 37, Issue 2, p141
- ISSN
0022-1821
- Publication type
Article
- DOI
10.2307/2098561