The impact of ownership structure on earnings quality: the case of South Korea

  • Abiot Tessema
  • Moo Sung Kim
  • Jagadish Dandu
Original Article


This paper investigates the impact of business group ownership structure on the quality of earnings reporting using data from South Korea. In addition, we investigate the impact of ownership disparity and family ownership on earnings quality reporting. Using a self-constructed earnings quality index as a measure of earnings quality, we found that business group ownership structure is significantly associated with higher earnings quality. The result suggests that strong monitoring mechanisms introduced by the government, which are necessary for credibility in external financial markets and beneficial to business group reputation, led to increased transparency in earnings reports. We also found that disparity in ownership between control and cash flow rights in firms, as well as family ownership in group firms, was both associated with lower earnings quality.


Business group Ownership structure Earnings quality South Korea 

JEL Classification

M41 M42 M48 


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Copyright information

© Macmillan Publishers Ltd., part of Springer Nature 2018

Authors and Affiliations

  1. 1.Zayed University College of BusinessAbu DhabiUnited Arab Emirates
  2. 2.Zayed University College of BusinessDubaiUnited Arab Emirates

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