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Corporate governance, product-market competition, and stock returns: evidence from the Korean market

Author

Listed:
  • Doowon Ryu

    (Korea University Business School)

  • Doojin Ryu

    (Sungkyunkwan University)

  • Joon Ho Hwang

    (Korea University Business School)

Abstract

This study examines the relationship among market competition, corporate governance, and stock returns in Korea, a representative emerging market. We find that the relation between product-market competition and a firm’s stock return is insignificant, but that better corporate governance is associated with a lower adjusted stock return when market competition intensifies in more competitive industries; This relationship is not evident in less competitive industries. Thus, the effects of corporate governance on stock returns depend on market-competition levels. We offer important empirical evidence by showing that the effects of corporate governance and product-market competition on firms’ stock returns can vary by country and market environment.

Suggested Citation

  • Doowon Ryu & Doojin Ryu & Joon Ho Hwang, 2017. "Corporate governance, product-market competition, and stock returns: evidence from the Korean market," Asian Business & Management, Palgrave Macmillan, vol. 16(1), pages 50-91, April.
    • Handle: RePEc:pal:abaman:v:16:y:2017:i:1:d:10.1057_s41291-017-0014-6
    DOI: 10.1057/s41291-017-0014-6
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