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Further Analyses on the Contemporary Changes of Profitability for the Firms Belonging to the Chaebol in the Republic of Korea

한국 재벌기업들의 수익성 결정요인에 대한 추세적 심층분석

  • Received : 2014.01.15
  • Accepted : 2014.02.27
  • Published : 2014.06.28

Abstract

This study addresses an empirical issue which has been received little attention in the contemporary finance literature: To identify any financial determinants of the profitability indices for the firms belonging to the Korean chaebol. Three hypotheses of concern were postulated and tested for the sample firms covering the periods of the pre-and post-financial global crises. Regarding the results on the 1st hypothesis test of characterizing any financial profiles for the firms (belonging to the chaebols) by estimating a legitimate panel data model: the present study found the statistically significant relationships of the explanatory variables (BVLEVl, MVLEVl, MV/BV, RISK, FCFF and FOS) with the book-value based profitability ratio: while the market-valued profitability index was explained only by BVLEV2. Regarding the 2nd hypothesis test for the profitability of the sample firms at the industry level: the chaebol firms in the chemical and the food industries overall positioned themselves into the top ranks in order, which was tested by the ANCOVA and the Tukey multiple comparison procedure. Finally: on the 3rd hypothesis test for the 'adjusted' Dupont system, only two such as the 'operating margin' and the 'asset turnover' showed their significant effects between the chaebol firms and their counterparts in both the (parametric) independent samples t-test and the (nonparametric) Wilcoxon-Mann-Whitney statistics.

Keywords

Profitability Index;Korean Capital Markets;The Panel Data Model;ANCOVA;Adjusted Dupont System

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Cited by

  1. Investigations on the Financial Determinants of Profitability for Korean Chaebol Firms by applying Conditional Quantile Regression (CQR) Model vol.14, pp.12, 2014, https://doi.org/10.5392/JKCA.2014.14.12.973
  2. Searching for Growth Engine: For the Firms Belonging to the Chaebol in the Korean Capital Markets vol.15, pp.12, 2014, https://doi.org/10.5762/KAIS.2014.15.12.7134