Ownership structure and family control in Korean conglomerates

The Korean enterprise group, known as chaebol, is unique for its corporate form consisting of a pyramid of subsidiary firms operated by a single line of family. This study investigates how the family of chaebol system has been able to exert its control over a wide range of businesses with its limited resources. It finds that the chaebol families, for the attainment of proper control, have maintained a certain amount of inside shareholding in various forms; share ownership by family itself, affiliate firms, non-profit organizations, and employees. At the same time, families of conglomerates have created intricate web of ownership network to grip the control in different styles; direct family control, indirect family control via a base company, indirect family control via non-profit institutions, and indirect family control via a combination of base company and outside institution.This study is conducted on the basis of support from The Asia Research Fund.