Family Control and Expropriation of Not-for-Profit Organizations: Evidence from Korean Private Universities

Title
Family Control and Expropriation of Not-for-Profit Organizations: Evidence from Korean Private Universities
Authors
Bae, Kee-HongKim, Seung-Bo
Keywords
Nonprofit; Governance; Expropriation; Donation; Private University
Issue Date
2006-10
Series/Report no.
KDI Working Paper Series;06-01
Abstract
We examine the agency problems of Korean private universities. A distinct feature of many Korean private universities is that they are under the control of founding families. There are few mechanisms to monitor families' discretionary power, which creates incentives to misbehave. We find that measures of family commitment (measures of family control) are positively (negatively) related to the university performance and that poorly governed universities are more likely to undergo a dispute between the controlling family and other stakeholders. Finally, we show that our results are not driven by the reverse causality that better performance leads to better university governance.
URI
http://archives.kdischool.ac.kr/handle/11125/17067
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KDI School Working Paper Series


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