Numerous studies have examined the relationship between firm performance and governance measures adopted by firms and find that generally there is a positive relationship between good governance and firm value. For example, Johnson, Boone, Breach, and Friedman (2000) show that for a sample of 25 emerging countries, governance variables, such as investor protection indices and the quality of law enforcement, explain more of the variation in exchange rates and stock market performance. Extending Johnson et al. (2000) to firm-level data of five East Asian countries, Mitton (2002) finds that firms with higher disclosure quality, greater transparency, higher outside ownership concentration, and corporate focus experienced better stock price performance. Lemmon and Lins (2001) also show that during the Asian financial crisis, firms in which controlling owner-managers owned more of the control rights, but fewer cash flow rights, suffered more loss of share values. Using detailed firm-specific governance variables in the Korean market, Joh (2003) shows that chaebol firms with high equity ownership by affiliated firm underperformed relative to independent firms. Baek, Kang, and Park (2004) further show that firms with higher ownership concentration by unaffiliated foreign investors and those with higher disclosure quality experience a smaller reduction in their share value. In contrast, chaebol firms with concentrated ownership by controlling family shareholders and those in which the controlling shareholders’ voting rights exceed their cash flow rights experience a larger drop in the value of their equity. In this study, we provide several direct evidences regarding corporate governance and firm value in Korean stock market.