Abstract
ABSTRACT This study examines the general equilibrium effects of the adoption of a dual-class share structure by an innovative firm in Korea. In contrast to previous studies, which are performed from a microeconomic perspective and focus on empirical analyses, this study is performed from a macroeconomic perspective and uses a theoretical approach based on a dynamic general equilibrium model. The calibrated results obtained using data from Korea show that the adoption of a dual-class share structure by an innovative firm increases real gross domestic product, total real consumption, social welfare, and total innovation ability by 0.63%, 1.23%, 1.23%, and 2.22%, respectively, but decreases the probability of failure to defend management rights by 6.44%. In contrast, the adoption of a dual-class share structure by a non-innovative firm has a much weaker effect because a non-innovative firm does not invest in innovation.
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