This paper examines the relation between ownership structure and firm value in Korean firms by considering the possible endogeneity of ownership structure using OLS equation and simultaneous equation regressions. The empirical results show that ownership structure affects firm value and firm value, in turn, affects ownership structure. In particular, we found that the higher the ownership by member firms in the same business group is, the higher the firm value is. The evidence implies that vertical transaction between member firms through equity holding facilitates information flows, reduces transaction cost and then increases firm value. However, it appears that individual insider ownership is not statistically significant in explaining the relation with firm value.