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Family control and expropriation at not-for-profit organizations: evidence from korean private universities

Author

Listed:
  • Bae, Kee-Hong
  • Kim, Seung-Bo
  • Kim, Woochan

Abstract

We study an agency problem in private universities — the conflict between controlling families and other stakeholders. We investigate whether universities over which controlling families have disproportionately significant power relative to the amount of funds they contribute, that is, universities with high expropriation risk, are associated with lower outside donations and poor quality. Using a sample of Korean private universities, we find that measures of family control in excess of monetary contributions are negatively related to the level of outside donation and measures of university quality. We also find that universities at which the controlling family exerts disproportionate control are more likely to face disputes between the controlling family and other stakeholders. Finally, we show that our results are not driven by reverse causality.

Suggested Citation

  • Bae, Kee-Hong & Kim, Seung-Bo & Kim, Woochan, 2012. "Family control and expropriation at not-for-profit organizations: evidence from korean private universities," MPRA Paper 44029, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:44029
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    References listed on IDEAS

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    Cited by:

    1. Kwon, Yonghyun & Han, Seung Hun & Lee, Bong-Soo, 2016. "Financial constraints and negative spillovers in business groups: Evidence from Korea," Pacific-Basin Finance Journal, Elsevier, vol. 39(C), pages 84-100.

    More about this item

    Keywords

    Corporate Governance; Non-profits; Expropriation; Donations; Private University;

    JEL classification:

    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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