This paper aims to explore price differences for dual class equity in terms of corporate governance in Korea. Using longitudinal data from the Korean stock market during 2004-2013, the study examines the direct and interaction effect of corporate governance on voting premium and aims to sift out which factor of corporate governance quantifies the value of votes among shareholder protection, board
independence, managerial transparency, audit, and profit distribution. The empirical study suggests that corporate governance index is not significantly related to voting premium in Korea. However, shareholder protection turned out to be the most significant indicator of price differences for dual class equity, whereas board independence and profit distribution are negatively related to voting premium. We also find that the ownership of domestic blockholders is likely to mitigate the impact of shareholder protection and board independence on voting premium, while the negative relation between board independence and voting premium is further reinforced by ownership of foreign blockholders. This study provides clues to the extant diverse findings with regard to voting premium, while offering a key to understanding in that shareholder protection plays a pivotal role in retaining intrinsic value of voting rights in the Korean stock market. 

Keywords: Voting premium, Corporate governance, Shareholder protection, Duel class equity​