DID YOU KNOW SERIES

-SPONSORED BY THE EU CENTRE FOR GLOBAL AFFAIRS SIGNATURE PROJECT ON GOVERNANCE

Are Returns of Family Firms with One Heir Less Volatile?

Lead Author: Thuy Lien Nguyen

CONTENTS

Preface 1

Key Take-home Points 1

Executive Summary 2

Background 3

Research Design 7

Data Collection 7

Research Method 8

Analysis 8

Only one heir or a transparent family-business successor 8

Multiple heirs to the CEO 10

Discussion 12

Comparison 12

Concluding Remarks 14

References and Further Reading 16

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Preface This report has been sponsored by one of the signature projects stemming from the EU Centre for Global Affairs at the University of Adelaide focusing on providing a comparative analysis of the business environments among EU, Australian and Asian countries. This report compliments the interactive database that is available on the EU Centre’s Research in Governance website. Key Take-home Points

Does leadership succession uncertainty in family-controlled firms across Korea and Japan lead to greater firm stock volatility?

This report examines the daily and annualized stock volatility of the largest 87 limited family-controlled firms in Korea and Japan, including 45 family firms with multiple heirs to the CEO, and 32 family firms with only one heir or a clearly assigned leadership successor.

The complexity and opaqueness in family leadership succession can lead to an additional governance risk that adversely creates greater stock volatility for family-controlled firms with multiple successors to the CEO position.

This report implies that transparency in family leadership succession can be an important factor in family-controlled firms’ governance, with subsequent impacts for firm value and stability.

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Executive Summary About the Report

This report provides insight into the impact of transparency in family leadership succession on firm value and stability in the context of family business groups in Korea and Japan over the five-year-period from 2011 to 2015. This research is one paper in a special project on Austral-EU-Asian corporate governance that is sponsored by the EU Centre for Global Affairs. The research aims to examine whether uncertainty in leadership succession in family-controlled firms in Korea and Japan leads to greater firm stock volatility. Uncertainty in identifying who is an heir to the firm chairman usually occurs in family business groups where there are multiple heirs, rather than only one heir, or an apparently assigned heir. In other words, this study focuses on whether firms with multiple heirs to the CEO position are lead to experience greater stock price volatility in comparison to family-controlled firms with only one successor. This study is motivated by two streams of literature. First, as a result of greater information asymmetry within family-business groups, a family feud about leadership succession may immediately signal poor governance or management performance to the trading market1. Additionally, prior literature also implies that firms with weaker corporate governance performance have volatile firm value and greater risk-bearing2, and thus investors expect more risks associated with firms which have a complicated governance structure. Key Findings

Over a five-year period from 2011 to 2015, The complexity and opaqueness in family leadership succession can lead to an additional

governance risk that adversely creates greater stock volatility for family-controlled firms with multiple heirs to the CEO position. The differences in stock volatility between the multiple and one-heir groups are statistically significant at the 90% confidence level.

The magnitude of the adverse effect of complex leadership on family firm stock volatility is likely to be persistent over the 5-year-period.

Conclusion

The findings from this research suggest that complicated business leadership succession can adversely affect firm value and stability for family-controlled businesses. Therefore, family business leaders should ensure that their businesses establish a highly transparent governance policy to mitigate negative effects of family leadership succession battles on firm value and stock price volatility.

1 Shiller, 1990, and 2003 2 Gompers, Ishii and Metrick, 2003, and Bae et al., 2012

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Background Succession battles have occurred in many family-controlled firms around the world, with those in Asia, especially in South Korea and Japan, being significantly frequent and damaging. About three-fourths of the world largest family-owned/controlled businesses are based in Asia3. Furthermore, many Asian business leaders are affected by cultural traditions that revere elders and lead to a lack of transparent mechanisms to replace/assign management. Additionally, in South Korea, a few key families have major power of control rights over some of the region’s largest business empires. Consequently, family business successions in Korean and Japanese business groups in the new era are significantly more uncertain and complicated. Some illustrations of this are given below.

Figure 1: Samsung Group Family Tree

The figure illustrates that the family leadership succession in the Samsung Group and Samsung Electronics. It is very clear that the only son is an automatic heir of the business. Source: Wall Street Journal, Korea Times, Forbes.

Family businesses may combine not only family members but also may consist of two or more families in partnership and multiple heirs4. An example is Samchully Co. Ltd. an energy company, which specializes in distributing liquefied natural gas in Korea, with a market capitalisation of ₩354.82 billion. The company was founded by two long-time friends, Yi Jang-kyun and Yoo Seong-yeon, in 19555. Later, their sons, Samchully Group’s successors - Yi Man-deuk and Yoo Sang-deok became the joint-leaders with equal rights and responsibilities6. The leadership heirs in this business group are from different families, and thus the leadership succession in the third family generations may be potentially more complex. 3 Wall Street Journal, 2015 4 Shrapnel, 2014 5 Bloomberg Business: Samchully Co Ltd 6 Bae, 2015

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In addition, not all family members participate equally in a family business. Specifically, sons in family owned-businesses typically inherit their family businesses while daughters are usually expected to marry into other families, or merely share a small percentage of their family firms’ control rights. For example, while Lee Kun-hee is the Samsung heir from his father Lee Byung-Chul, his sister Lee Sook-hee married an LG heir, while his other sisters Lee In-hee and Lee Myeong-hee have created their own business groups (Figure 1). In the same way, Lee Jae-yong, rather than his sisters, took over Samsung Electronics and Samsung group in May 2015. He is a current vice chairman of Samsung Electronics, and the only son of the current chairman Lee Kun-hee of Samsung Electronics and Samsung Group (Figure 1). In addition, while he is also holding a 23.3% direct stake in Samsung Everland/Cheil Industries, his sisters Lee Boo-jin and Lee Seo-hyun, are holding 8% and 7% direct shares in Samsung Everland respectively7. Likewise, among the four children of Chung Mong-Koo, the current chairman of Hyundai Motor Co. Ltd. and Kia Motor Co. Ltd., the only son, Chung Eui-sun is an apparent family-business group heir to the chairman and CEO while his sisters do not engage in management of the family business (Figure 2). In the above examples, the family business is given automatically to the family’s only son, thus making leadership successions in those businesses clear and simple.

Figure 2: Chung Mong-Koo Family Tree

The figure illustrates the family leadership succession of the Hyundai and Kia Motor group. Source: “Super Rich: Chung family makes mark in corporate Korean”, The Korea Herald, published 28/4/2014.

In contrast, succession in a family business may become more multifaceted when a family business has more than one son and sons are in a succession battle. For example, leadership succession in the Doosan Corporation frequently changes due to family feuds between brothers in the third-generation of the Park family. Doosan Co. Ltd. is a Korean-based holding electronic and industrial vehicle business group with a market capitalization of ₩1,760.525 trillion8. The business experienced three successive changes of business leadership because of family succession battles between the fourth, fifth and sixth sons, after their father’s death in 1973 (Figure 3).

7 Reuters, 2015 8 Reuters: Doosan Co Ltd

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Similarly, a complicated family leadership succession battle in the Lotte Group9 between the father, his one daughter and two sons has attracted media and investor attention (Figure 4). The fight began on July 27th 2015 when the younger son Shin Dong-bin, chairman of Lotte Group and CEO of Lotte Holdings, was fired by his father. The next day, Shin Dong-bin held an emergency meeting at which he sacked his father as general chairman of Lotte Holdings, and kept both his executive titles. Shin Dong-bin said that his elder brother Shin Dong-joo was preying on their father’s frailty and forcing his hand. In contrast, the elder son, Shin Dong-joo, former vice chairman of Japan-based Lotte Holdings, claimed that his younger brother hid large losses at Lotte’s Chinese unit from his father. In addition, he also provided evidence suggesting he was the rightful family heir of Lotte Holdings.

Figure 3: Doosan Family Tree

The figure illustrates a more complex case of family leadership succession in the Doosan family business group. Source: “Doosan Group rose from humblest of beginnings”, Korea Joogang Daily, published on 6/5/2015 and Forbes.

While public reaction to the feud has been caustic, the opaque chairmanship of Lotte Group may influence its shareholders’ trust in Lotte’s transparency and firm governance performance in the short-term. Not surprisingly, the complicated Lotte family-succession battle has weighed on the share price. After a week of the succession battle, Lotte Shopping’s share price dropped over 8 percent while the stock prices of Lotte Chemical and Lotte HiMart decreased 4 percent and 2.7 percent respectively10. A most interesting and complicated case is the family leadership succession feud in the Hyundai group in Korea between the sons and daughter-in law of the former chairman Chung Ju-yung. The current chairwoman of the Hyundai group is Hyun Jeong-eun, a daughter in-law of Chung Ju-yung. She took over Hyundai Elevator and Hyundai Group after her husband’s suicide in 2003. However, she had to face a decade-long family feud against her brother-in-law, Chung Mong-

9 Lotte Group, a multinational conglomerate, operates in the food, chemicals, shopping and financial service industries with headquarters in South Korea and Japan. Lotte is the largest confectionary manufacturer in Korea, and is the third largest in Japan with sales revenue of ₩28.1 trillion in 2014 (Lotte financial report 2014). 10 Chandran, 2015

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koo, the founder’s eldest surviving son11. Strikingly, although Hyun Jeong-eun is the current leader of the Hyundai group, the sons of Chung Ju-yung manage and have the right to choose an heir apparent to their own family businesses (Figure 5). In particular, the Hyundai Motor and Kia Motor Companies were created and separated from the Hyundai group by Chung Mong-koo. Additionally, he announced that only his son Chung Eui-sun is an heir apparent to those companies (Figure 5).

Figure 4: Lotte Group Family Tree

The figure illustrates that family leadership succession in the Lotte family business group is unclear. Source: Bloomberg, and The Korea Herald.

Furthermore, the Chung family tree also illustrates that the creators of some family businesses in Korea can be brothers or sisters within a family (Figure 6). These family members have created their own businesses, and have the right to decide who will be heir to their businesses. Therefore, those businesses have a separate and different leadership succession. For example, Hyundai Engineering and Construction created by Chung Se-yung has a different heir than the heir of Hyundai group formed by Chung Ju-yung (Figures 5 and 6). Similarly, Hyun Jeong-eun, who is the current chairwoman of the Hyundai group, cannot appoint the heir to the Hyundai Motor and KIA motor company which was created by Chung Mong-koo. In contrast, Chung Mong-koo is the only person who can choose who will take over his businesses (Figure 5). Indeed, the founders of those businesses are more likely to pass their business to one of their children. For that reason, some family-controlled companies with names which commence with ‘Hyundai’ may have different family leadership succession. Therefore, they may be classified under the one heir group, or alternatively the multiple heir group, depending on the family relationship of the founder or current chairman in each of the Hyundai firms, and on whether those firms were created and owned by the same family member or family unit. Consequently, judgements on whether a company has one heir or multiple heirs rely primarily on examining the structure of each family unit rather than by generalising along the lines of similar company names. From the observed family succession feuds, this research employs a sample of the largest family business groups in Korea and Japan in order to investigate how investors respond to opaque and complex leadership succession in family-controlled businesses from 2011 to 2015.

11 Park and Lim, 2010

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Figure 5: Chung Ju-Yung Family Tree

Source: “Super Rich: Chung family makes mark in corporate Korean”, The Korea Herald, published 28/4/2014, and Forbes.

Research Design Data Collection

Family ownership data is collected from the Osiris database. The report employs a sample of the largest 87 family-controlled firms in Korea and Japan, including 45 family-controlled firms with multiple heirs, and 32 family-controlled firms with only one heir or a clearly assigned leadership successor. These firms are the largest and most well-known family-controlled firms in Korea and Japan with firm operating revenues/ turnover in 2014 ranging from $187,579,357USD (Samsung

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Electronics Co. Ltd.) to $322,333USD (Nexen Corporation). Furthermore, family structure and family successor information is hand-collected from a wide range of Korean and Japanese business news publications including Forbes, Bloomberg as well as firm websites. In addition, firm stock volatility is calculated from firm stock price data extracted from Thomson One for the period from 2011 to 2015. Research Method

To address the research question, the report analyses and compares stock price volatility between family businesses with multiple heirs and those with only one heir in Korea and Japan. The research allocates firms with multiple heirs to the CEO position into the treatment group, and firms with only one heir into the control group. In each group, daily and annualized stock price volatility is analysed to determine a range and mean of stock price volatility. A range of daily/annualized volatility is identified by finding family businesses with the greatest and smallest mean stock volatility over the five-year period from 2011 to 2015. Finally, the study illustrates differences in stock volatility between the treatment and control groups. In addition, this research also examines whether the results are biased because of industry factors. Analysis Only one heir or a transparent family-business successor

The one heir group includes family-controlled businesses which have only one heir or a clear chairmanship. The mean daily price volatility in this group fluctuated from 1.1 percent to 2.9 percent from 2011 to 2015. Most of the family-controlled firms with a clear leadership succession plan have their mean daily volatility around 1.99 percent (Figure 7). Among family firms in the one heir group, Shidax Corporation, a Japan-based family company in the food service industry with a market capitalisation of ¥21.81 billion in 201512, has the smallest firm daily stock volatility of 1.1% during the period from 2011 to 2015 (Figure 7). Shidax is the fifth largest company in Japan’s food service industry. The single heir, Ken K. Shida, the president of Shidax Corp., inherited the 50-year-old family business from his father Tsutomu Shida, who is the founder of Shidax Corp and now serves as its Supreme Adviser13. In contrast, among family firms in the one heir group, the Korean based Hyundai Development Engineering and Construction Co. Ltd. experienced the greatest mean daily stock volatility (2.9%) over the last five years (Figure 7). Hyundai Development Engineering and Construction operates primarily in the engineering and construction industry with a market capitalisation of ₩2.925 trillion KRW in 201514. This family business was established in 1986 from a merger between Korea City Development and Halla Construction. Thereafter, under the management of Chung Mong-gyu, Hyundai Development Company was separated from Hyundai group in August 1999.

12 Reuters: Shidax Corp. 13 Bloomberg Business: Shidax Corp. 14 Reuters: Hyundai Development Co Eng. & Const. – 012630. KS

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Chung Mong-gyu is the eldest and only son, who took over the family business after his father’s death in 200515.

Figure 6: Chung Family Tree

This figure illustrates the Chung family tree and family leadership heirs in their family businesses. Source: “Super Rich: Chung family makes mark in corporate Korean”, The Korea Herald, published 28/4/2014 and Forbes Consistent with the above results, family-controlled businesses in the one heir group have a mean annualized volatility of 30.7 percent during the five years from 2011 to 2015. On average, stock prices in this group fluctuate by between 17.0 percent and 45.2 percent. The order of family-controlled firms sorted by magnitude of mean stock volatility from 2011-2015 does not change much between daily stock volatility and annualized volatility. Specifically, Shidax Co. Ltd. still has the lowest mean annualized stock volatility of around 17 percent while Hyundai Development Company still stands at the greatest annualized stock volatility of 45.2 percent on average16.

15 See Chung family tree in Figure 6 for more information. 16 The figures for daily and annualized stock volatility in the only heir group look analogous, thus I display one of them in the report and discuss the other in the text.

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Figure 7: One heir group – Mean of daily stock volatility (2011-2015)

Note: The daily stock volatility in the one heir group fluctuates from 1.1% - 2.9%. Meanwhile, the red vertical line presents the average of mean of daily volatility stands at 2%. The sample of one heir group includes 19 Korean family-owned businesses and 13 Japanese-based family-owned businesses. Source: Reuters Thomson One.

Multiple heirs to the CEO

Over the last five years, the overall average of mean daily stock volatility for multiple heir family firms is around 2.4 percent17. The mean daily price volatility of family businesses with complex leadership succession varies from 1.2 percent to 4.7 percent from 2011 to 2015 (Figure 8). The research also shows that family-controlled businesses with complex leadership succession have mean annualized volatility fluctuating within a wide range (from 19.2 to 74.2 percent) with a mean value of 37 percent during the period 2011-201518. In addition, two multiple-heir-family-controlled firms in the manufacturing and heavy industry in Korea – Hyundai Elevator Co. Ltd. and Kumho Industrial Co. Ltd. – had the greatest mean daily stock volatility at 4.7 percent and 4.2 percent, respectively during the last five years (Figure 8).

17 The average of mean daily stock volatility is represented by a red vertical line in Figure 8. 18 Similarly, the figures for daily and annualized stock volatility in the multiple heir group look analogous, thus I display one of them in the report and discuss the other in the text.

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Furthermore, Hyundai Elevator also experiences the greatest mean annualized stock volatility at 74.2 percent.

Figure 8: Multiple heir group – Mean of daily stock volatility from 2011 to 2015

The daily stock volatility of the multiple heir group fluctuated from 1.2%-4.7%. Meanwhile, the red vertical line presents the average of mean of daily volatility stands at 2.4%. The sample of multiple heir group includes 27 Korean family-owned businesses and 18 Japanese-based family-owned businesses. Source: Reuters Thomson One.

Hyundai Elevator Co. Ltd. is a transportation business of Hyundai Group based in Korea. It is the second-largest elevator and escalator manufacturer in South Korea with a market capitalisation of ₩1.483 trillion KRW19. Although Hyun Jeong-eun, the daughter in-law of Chung Ju-yung, took over the business after her husband’s suicide in 2003, family leadership battles between Hyun

19 Reuters: Hyundai Elevator

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Jeong-eun and the other sons of Chung Ju-yung persist inside Hyundai Elevator and the Hyundai group20. Recently, foreign investors have begun to pay more attention to the transparency of family succession, and its effects on family businesses. For example, Hyundai Elevator lost around ₩600bn while helping its chairwoman Hyun Jeong-eun defend a lawsuit from a foreign investor (Swiss elevator maker) after a family feud over control rights between two branches of Hyundai group. This case reflects the increasing concerns about the quality and stability of corporate governance standards within complex family-controlled chaebol groups in Korea. In contrast, Dydo Drinco Inc., a manufacturer and retailer in the Japanese beverage industry (with market capitalisation of ¥92,949.28 million21) experienced the lowest daily stock volatility at around 1.2 percent from 2011 to 2015 (Figure 8). Additionally, Dydo Drinco Inc. has a stable annual variation in stock price, at an average of around 19.2 percent over the five years from 2011 to 2015. Discussion

Overall, this research finds that family-controlled businesses operating in the food and beverage industry (Shidax and Dydo Drinco companies) may have a lower risk of stock volatility than family-founded companies operating in industries such as manufacturing, engineering and construction (Hyundai Development and Hyundai Elevator companies), regardless of whether they are in the one heir or multiple heir group. In addition, when examining the stock volatility of family businesses in the same industry, the study finds that family-controlled firms with complex leadership succession may have greater firm stock volatility. For example, Shidax Corp. and Dydo Drinco, Inc. are both in the food and beverages industry, but Shidax Corp with only one heir, has a smaller mean stock volatility than Dydo Drinco Inc., which is faced with potential family feuds over succession of the business. Furthermore, during the last five years, stocks of family-controlled companies with multiple heirs experience daily volatility within a wider range (1.2 percent to 4.7 percent) (Figure 8), in comparison to those with only one heir to the CEO position (1.1 percent to 2.9 percent) (Figure 7). Comparison

This section examines the magnitude and persistence of family-controlled firm stock volatility differences between the one heir and multiple heir groups over the period 2011 - 2015. Overall, the complexity of leadership succession in founding family firms with multiple heirs seems to be associated with more variation in firm stock prices during the period between 2011 and 2015 when compared to family-controlled firms with only one heir22. The difference in sample stock volatility means between the two groups is statistically significant at the 90% confidence level.

20 See more detail in the background section and Figure 5: Chung Ju-yung family tree 21 Reuters: Dydo Drinco Inc. 22 The orange line, which represents overall daily stock volatility in the multiple heir group, consistently lies above the dark blue line which represents overall daily stock volatility in the one heir group from 2011 to 2015.

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Additionally, movement trends of firm stock volatility over the period are comparable between the two groups23. Generally, firm stock prices in both groups are most volatile in 2011, but move the least in 2014 (Figures 9 and 10). One of the potential reasons for this is that stock market prices in Korea and Japan were influenced adversely by the 2008 global financial crisis. In particular, mean daily volatility in the multiple heir group climbs up to 3.0 percent in 2011 while stock prices in founding family companies with only one heir are volatile by around 2.5 percent on average in that year (Figure 9). Additionally, in each year from 2011 to 2015, mean daily stock volatility in the multiple heir group is higher than that in the one heir group by about 0.3 percent. Strikingly, the magnitude of variation (0.3 percent) in mean stock volatility between the two groups is persistent over the five-year period.

Figure 9: Daily Volatility

The figure illustrates a comparison of mean daily stock volatility between multiple-heir group and one-heir group during the period from 2011 to 2015. On average, family businesses in multiple-heir group experience a greater annualized stock volatility than those in one-heir group. Source: Reuters Thomson One.

When comparing the average mean annualized volatility between the two groups, the study shows that stock prices of companies with opaque leadership successions can be significantly more volatile than those of businesses with a clear succession. As can be seen in Figure 10, the orange line which illustrates the mean annualized stock volatility of family businesses in the multiple heir group, lies above the dark blue line which represents the mean annualized stock volatility of companies in the one heir group.

23 An F-test shows that the variances of the two groups are equal at a 95% confidence level. T-tests show that the observed differences between the sample daily stock volatility means (2.4 – 2 percent), and those of annualized stock volatility (37.3 – 30.7 percent), are statistically significantly different at the 90% confidence level. Therefore, it can be concluded that the average means of daily and annualized stock volatility between the two groups differ significantly at the 90% confidence level.

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On average, stock prices in the multiple heir group show volatility annually of around 47.1 percent in 2011 while this figure is merely 37.3 percent in the one heir group (Figure 10). Additionally, in the multiple heir group, mean annualized stock volatility drops to 34.7 percent on average in the next two years before slightly falling to 32.3 percent in 2014, and rising up to 37.6 percent in 2015 (Figure 10). Meanwhile, in the one heir group, stock price volatility is around 28.4 percent on average from 2012 to 2014, and jumps up to 32.1 percent in 2015.

Figure 10: Annualized Volatility

The figure illustrates a comparison of mean annualized stock volatility between multiple-heir group and one-heir group during the period from 2011 to 2015. On average, family businesses in multiple-heir group experience a greater annualized stock volatility than firms in one-heir group. Source: Reuters Thomson One.

Concluding Remarks Motivated by increasing concerns around transparency in corporate governance standards for family-controlled businesses, especially in Korean chaebols, this research examines whether complexity and opaqueness in leadership succession for family-controlled companies can result in additional governance risk, and thus to greater firm stock volatility. To address this research question, the study employs a sample of the 87 largest listed family-controlled firms in Korea and Japan with either multiple heirs, or only one heir to the CEO position. Using this sample, the research empirically tests differences in size and trend of firm stock volatility between the two family firm groups. The results observed over the five-year period from 2011 to 2015 are consistent with expectations. Family-controlled firms with multiple heirs to the CEO position can experience greater firm stock volatility than family firms with a clear succession arrangement. However, the year-on-year movement trends in stock volatility are similar between the two groups. Finally, the research implies that (i) the effect of complexity and opaqueness in family leadership succession is to lead to greater stock price volatility, and (ii) the magnitude of this effect is likely to be persistent during the period 2011-2015.

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Based on these findings, I suggest that policy-makers may want to issue formal rules to identify who will have an automatic right to take over family leadership succession in a family business group if there exists an unclear or complex succession structure in a given firm. The formal rules may require family businesses (i) to disclose information around the process employed to appoint an heir in the business group, and (ii) to produce their own apparent leadership succession policies to be included in their firm governance documents. The results from this study may inspire future research to employ a larger sample of family-controlled businesses in more countries as well as controlling for additional firm and country fixed factors to re-examine the research question. Furthermore, future research may also investigate determinants of the persistence in the effect of family leadership succession on firm stock volatility, and whether this persistence exists over longer periods of time.

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References and Further Reading Bae Ji-sook, 2015, “[SUPER RICH] Friendship sustains Samchully through generations”, The Korea Herald,

published 2015-04-21, http://www.koreaherald.com/view.php?ud=20150421000847, viewed 2/12/2015.

Bae, K.H., Baek, J.S., Kang, J.K. and Liu, W.L., 2012, “Do controlling shareholders' expropriation

incentives imply a link between corporate governance and firm value? Theory and evidence”, Journal of financial Economics, Vol. 105, No. 2, pp.412-435.

Bloomberg Business, Samchully Co Ltd (004690:KS), http://www.bloomberg.com/quote/004690:KS,

viewed 2/12/2015. Bloomberg Business, Shidax Corporation (4837: Tokyo Stock Exchange),

http://www.bloomberg.com/research/stocks/people/person.asp?personId=8338733&capId=883819&previousCapId=883819&previousTitle=SHIDAX%20CORP, viewed 2/12/2015.

Chandran, N., 2015, “Vicious South Korean family feud exposes chaebol peril”, CNBN, published 2015-

08-05, http://www.cnbc.com/2015/08/05/lotte-family-feud-exposes-chaebol-peril.html , viewed 2/12/2015.

Gompers, P.A., Ishii, J.L. and Metrick, A., 2003, “Corporate governance and equity prices”, The Quarterly

Journal of Economics, Vol. 118, No.1, pp.107-156. Lotte Financial Statement, 2014, https://www.lotte.co.kr/eng/03_invest/inv_financial_statement.jsp,

viewed 2/12/2015. Mundy, S and Song Jung-a, 2014, “Hyundai chairwoman faces legal action over family feud”, Financial

Times, published 2014-02-05, http://www.ft.com/cms/s/0/fb1c47a0-8cb6-11e3-ad57-00144feab7de.html#axzz3vthFxiD6, viewed 2/12/2015.

Reuters, Dydo Drinco Inc. (2590.T), http://www.reuters.com/finance/stocks/overview?symbol=2590.T,

viewed 2/12/2015. Reuters, Hyundai Elevator Co. Ltd. (017800.KS),

http://www.reuters.com/finance/stocks/overview?symbol=017800.KS, viewed 2/12/2015. Reuters, Hyundai Development Co Eng. & Const. (012630. KS),

http://www.reuters.com/finance/stocks/overview?symbol=012630.KS, viewed 2/12/2015. Reuters, Shidax Corp. (4837.T), http://www.reuters.com/finance/stocks/overview?symbol=4837.T,

viewed 2/12/2015. Shiller, R.J., 1990, “Market volatility and investor behavior”, American Economic Review, Vol. 8, No.2,

pp. 58-62. Shiller, R.J., 2003, “From efficient market theory to behavioral finance”, Journal of Economic

Perspectives, Vol.17, No.1, pp. 83-104. Shrapnel,R., 2014, “Succession Reset – Family business succession in the 21st century”, Success

Strategies, Barriers and Dynamics, Pitcher Partners Advisors Proprietary Limited.