ScholarWorks@성균관대학교

초록

The phenomenon of the “Korea discount,” a structural undervaluation of Korean listed firms, has weakened the competitiveness of the domestic capital market, reduced foreign investment, and increased corporate capital costs. Previous academic and practical discussions have primarily focused on individual factors, such as low dividend payout ratios, accounting opacity, and weak institutional protection of shareholder rights. However, capital market valuation is shaped by the interaction among these factors, which may reinforce or offset one another. This study examines how dividend policy, earnings quality, and shareholder rights protection jointly affect firm value and uses a cross-country approach to identify the causes of the Korea discount. Using 86,730 firm-year observations from 28 countries for 2013-2022, obtained from the Compustat Global database, we find that Korean firms exhibit significantly lower Tobin’s Q than comparable firms in other countries, confirming the existence of the Korea discount. Although dividend payments are generally associated with higher firm value, Korean firms show a negative association bet ween dividends and firm value. However, among Korean firms with high earnings quality, the negative association bet ween dividends and firm value is significantly attenuated, whereas dividends do not improve firm valuation when earnings quality is low. We also find that high-quality earnings alone do not lead to higher firm value unless accompanied by strong legal and institutional protection for shareholders. These results suggest that resolving the Korea discount requires not only dividend expansion but also improved accounting transparency and stronger investor protection.

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