The Study On The Correlation Between Corporate Governance And Stock Return Rate

The aim of this study was to illustrate the correlativity of corporate governance and values and analyze how they works in the form of stock return through solid evidence.Therefore,to ensure that Korea company has the motivation to improve corporate governance to prove that the superiority of corporate governance is favorable to corporate values in the long term.The total 516 related data of listed company comprised of over 2000 panel data from 2012-2016 collected in this study will be applied after fractionation and standardization evaluated by dominator from Korea company affiliated to dependent variable based on “Corporate Governance Level” issued in June every year.Based on that,three hypotheses proposed in this study has been proven through regression analysis.The first hypothesis--"there is a positive correlation between corporate governance score and stock return rate" is not obvious,but still shows kind of correlation,which is Proven from the perspective of statistics.The second hypothesis--"there is a negative correlation between share-holding rate of controlling shareholder and stock return rate".From the perspective of statistics,any desired results are unavailable.The analysis and explanation for this result can go in this way.With the special characteristics of Korea economy and company considered,inference has been proposed in this thesis.The third hypothesis--" there is a positive correlation between share-holding rate of foreign shareholder and terminable yield rate",which supports the current theory with higher positive correlation.For further study,the largest variable shall be divided for Chaebol company and non-Chaebol company and manufacturing industry and non-manufacturing industry.As a result,compared with Chaebol,non-Chaebol company feels more sensitive to governance structure variables.As for variables,manufacturing industry is more elastic than the non-manufacturing industry.After foreign exchange crisis,the awareness of improving corporate governance has been raised and its study has been carried out positively in Korea.However,the current prior study is confined to the before and after foreign exchange crisis.After the related systems and practices begin to appear,the limitation lies in weak promotion after 2010.Therefore,this study aims at providing solid evidence to overcome the epoch-making limitations in the current study.The company’s improvement for capital structure and all the governance structure turns out to be favorable to the benefits of shareholders.