A multi-objective optimization model for dissolving circular shareholdings in Korean conglomerates

Jihye Jung, In Chan Choi

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


Circular shareholding is an intriguing ownership structure that enables a major shareholder to gain control of subsidiaries with only small investments. The conflict between the public interest and corporate interest regarding circular shareholding has presented policymakers with unresolved legal issues. To support systematic decision making by policymakers in this circumstance, we propose a multi-objective bilinear optimization model to address the circular shareholding problem. The proposed model provides policymakers with various scenarios corporates could make, assuming the enforcement of regulatory law on circular shareholding along with consideration of the public interest with different weights. We also conduct computational analysis on the model with real data from conglomerates in Korea, where debates about circular shareholding are ongoing. The results show clear patterns between obtained solutions, suggesting the possibility of a quantitative basis for legislation regarding circular shareholding and corporate governance.

Original languageEnglish
Article number101307
JournalSocio-Economic Planning Sciences
Publication statusPublished - 2022 Aug

Bibliographical note

Funding Information:
☆ Declaration of interest: none. The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Publisher Copyright:
© 2022 Elsevier Ltd


  • Circular shareholding
  • Korean conglomerate
  • Mixed-integer optimization model
  • Multi objective programming

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Economics and Econometrics
  • Strategy and Management
  • Statistics, Probability and Uncertainty
  • Management Science and Operations Research


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