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KMI International Journal of Maritime Affairs and Fisheries
Korea Maritime Institute

KMI Int. J. Marit. Aff. Fish. 2020; 12(1):17-30

pISSN: 2005-9795

DOI: https://doi.org/10.54007/ijmaf.2020.12.1.17

Article

Do Differences in Corporate Governance Make a Discrepancy in Firm Value? The Case of the Shipping and Shipbuilding Industry

Yo-han An*
*Assistant Professor, Department of Finance & Accounting, Tongmyong University, Busan. E-mail: accahn@tu.ac.kr

© Copyright 2021 Korea Maritime Institute. This is an Open-Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

Published Online: Jun 30, 2020

ABSTRACT

As Korea’s core industries, the shipping and shipbuilding industry have global competitiveness and mutually related. After the Global Financial Crisis in 2008, both industries fall into financial depression, thus progress financial re-structuring forced by the Korean government. In the process of restructuring, government policy loans concentrated on the shipbuilding industry rather than the shipping industry.

Based on these facts, this study examines the impact of corporate governance on firm value in the shipping and shipbuilding industry. This study develops its research question by comparing the firm value between ownership structure and board structure using panel data set during a sixteen-year period (2000-2015).

This study finds that government ownership decreases firm value in the shipbuilding industry while it positively affects firm value in the shipping industry. Specifically government ownership in the shipbuilding industry is four times higher than that of the shipping industry. This result suggests that excessive governmental ownership rather decreases firm value; Board composition in the shipping industry operates more efficiently than board composition in the shipbuilding industry. Therefore, in order to rebuild Korea's shipping and shipbuilding industries, a systematic government policy considering the industrial value chain is required, and the function of board structure must be strengthened.

Keywords: Board Structure; Corporate Governance; Firm Value; Ownership Structure; Shipping and Shipbuilding Industry