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Family ownership and Labour investment efficiency: Evidence from Korea

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  • Kyoungwon Mo
  • Kyung Yun (Kailey) Lee
  • Seun-Young Park

Abstract

This paper examines whether founding-family ownership affects firms’ labour investment efficiency. By analysing public Korean companies from 2001 to 2018, we found that family firms are more efficient than non-family firms in regard to labour investment. The results show that family firms can achieve greater efficiency in labour investment by avoiding over-firing issues, thereby reducing underinvestment in employment problems. Additionally, we found that family firms make more efficient labour-related decisions with greater external financing. Overall, the results suggest that family firms’ long-term perspective enables them to maintain optimal labour levels.

Suggested Citation

  • Kyoungwon Mo & Kyung Yun (Kailey) Lee & Seun-Young Park, 2022. "Family ownership and Labour investment efficiency: Evidence from Korea," Applied Economics Letters, Taylor & Francis Journals, vol. 29(12), pages 1073-1078, July.
    • Handle: RePEc:taf:apeclt:v:29:y:2022:i:12:p:1073-1078
    DOI: 10.1080/13504851.2021.1908511
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    Cited by:

    1. Wu, Mengyun & Zhang, Xuge & Lu, Jie & Chen, Yanxia, 2024. "De-familiarization governance and family firm investment efficiency," Finance Research Letters, Elsevier, vol. 62(PB).

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