• Management & Information Systems Review
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• v.34 no.5
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• pp.213-231
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• 2015

In this paper, I examine whether the listed companies in Korea tend to manage operating cash flows upward via classification shifting after the adoption of K-IFRS. As proxies for cash flow management, I derive a measure of abnormal operating cash flows borrowing from Lee(2012). Alternative proxies include a series of categorical variables designed to identify the types of classification shifting of interest and dividend payments among others, in the statement of cash flows. Higher level of estimated abnormal operating cash flows, and the classification of interest/dividend payments in non-operating activity sections are considered to indicate the managerial intention to maximize reported operating cash flows. I consider several potential incentives to manage operating cash flows, which include financial distress, the credit rating proximity to investment/non-investment cutoff threshold, avoidance of negative or decreasing operating cash flows relative to previous period and so forth. In a series of empirical analyses, I do not find evidence in support of the opportunistic classification shifting explanation, inconsistent with several previous literature in Korea. In contrast, I observe negative associations between the CFO management proxies and selected incentives, which suggest that the classification is likely to represent above average cash flow performance rather than opportunistic motives exercised to maximize reported operating cash flows. I reckon that this observation is, in part, driven by the K-IFRS requirement to maintain temporal consistency in classifying interest and dividend receipts/payments in cash flow statement.

• The Journal of the Korea Contents Association
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• v.15 no.7
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• pp.436-448
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• 2015

This study examined one of the contemporary financial aspects, the level of corporate cash holdings for the firms belonging to the chaebols in the Korean capital markets. Being accompanied by various alternative econometric methodologies such as static and dynamic panel data model, stepwise OLS, and Fama-Macbeth modelm this research extended the preceding Kim's study (2015) in anticipation of validating the results to identify any financial factors which may significantly affect the chaebol firms' cash reserves. Several financial characteristics such as CASHFLOW, MVBV, REINVEST, and AGENCY, were found to be statistically significant factors on the level corporate liquidity, along with CCC as cash conversion cycle in the models. It may be plausible that any outcomes of this study may be applied to enhance the efficiency of financial strategies of the chaebol firms on cash holdings, thereby expediting the development of the domestic capital markets status quo toward the advanced one in the market classification.

• The Korean Journal of Financial Studies
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• v.9 no.1
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• pp.69-93
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• 2003

본 연구는 자사주매입에 대한 공시가 기업가치에 어떠한 영향을 미칠것이며 공시일 전후 주가반응이 자사주매입 한도 변경에 따라 시장에서 어떻게 반응할 것인지 그리고 아직 학계에서 다루어지지 않은 미시적인 관점에서 실제 자사주매입 비율에 영향을 미치는 요인이 무엇인지에 관해 실증분석을 실시하였다. 실증분석 결과 자사주매입 공시일 전후 유의적인 양(+)의 비정상초과수익률을 나타내었으며, 한도확대 이후 누적비정상수익률은 유의적으로 증가하였다. 목표매입비율이 클수록 유의적으로 누적비정상수익률은 증가하는 것으로 나타나고 있어 자사주 취득에 대한 저평가 가설을 지지하는 것으로 해석된다. 예기치 않은 현금흐름은 대체로 누적비정상수익률과 양(+)의 유의적인 관계를 보여 예기치 않은 현금흐름이 많은 기업일수록 자사주매입의 정보효과가 크게 나타나 Stephens & Weisbach(1998)의 결과와 일치하였다. 또한, 자사주매입 이후 1개월의 성과를 나타내는 누적비정상수익률은 실제 자사주매입 비율과 유의적인 부(-)의 관계를 보여 공시 이후 주가가 상승할수록 목표대비 실제 자사주매입액은 감소하여 경영자가 공시 이후 주가변화추이에 따라 자사주매입 수량을 조정하고 있는 것으로 파악되었다.

• Journal of Technology Innovation
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• v.20 no.1
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• pp.45-73
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• 2012

In this paper, we analyse empirically the effects of financial characteristics on the relationship between R&D investment and market value of firms listed on Korea Exchange. The main results of this study can be summarized as follows. Firm size increase the market valuation of R&D investment because it provides economies of scale, easier access to capital market, and R&D cost spreading. Market share also positively effects the relationship between R&D investment and firm value. Alternatively, free cash flow has a negative effect on the relationship between R&D investment and firm value because firms with high free cash flow could be tempted to use the free cash flow to undertake negative NPV projects. The dependence on external finance is a handicap negatively assessed by the market when firms undertake R&D projects due to the higher information asymmetry associated with this kind of project. Labor intensity has a negative effect on the relationship between R&D investment and firm value because the abnormal profits arising from R&D investment are diluted among employees. Capital intensity also has a negative effect on the relationship between R&D investment and firm value due to the greater financial constraints faced by capital intensive firms. In conclusion, several financial characteristics(firm size and market share) positively effect the relationship between R&D investment and firm value, while others(free cash flow, dependence on external finance, labor intensity, and capital intensity) exert a negative effect. Therefore, we conclude that the effectiveness of R&D investment depends on these financial characteristics.

• Korean Journal of Construction Engineering and Management
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• v.19 no.2
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• pp.25-37
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• 2018

In recent times, private sector allocates the risk between private sector investors in terms of equity transaction and agreement transaction. The additional risk-allocation have made the cash flows of private sector investors fluctuated and some of the PPP projects delayed. Therefore, analyzing the impact of the risk reallocation between private sector investors on their cash flows is critical for encouraging the private sector participants. In this study, a model to evaluate the financial viability of PPP project is developed based on the discounted cash flow analysis. The model can analyze the variability by equity and agreement transaction by identifying key variables of equity transaction, influence factors of agreement transaction, and relationship between the transactions and investor's profitability. It is expected that the private sector can determine the investment decision for PPP projects when the risk reallocation is occurred.

• The Korean Journal of Financial Management
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• v.18 no.2
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• pp.1-25
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• 2001

본 연구에서는 우리나라 기업에서 내부현금흐름과 부채가 투자지출과 어떠한 관계에 있는가를 분석함으로서 외부자금조달의 제약 및 대리인 문제가 투자지출에 미치는 영향을 분석하였다. 분석의 결과, 전체 기간에 대하여 투자지출은 내부현금흐름과 강한 양(+)의 관계를 나타내어 외부 자금조달의 제한이 투자지출에 큰 영향을 미치는 것으로 나타났다. 그러나 표본을 분류하여 분석한 결과, 단독기업이 재벌기업에 비해 정보비대칭 문제가 심각하므로 더 큰 외부자금조달의 제한에 직면할 것이라는 증거는 발견되지 않았으며, 주식시장의 장세에 따른 분석결과, 주가 상승기에 투자지출과 부채비율은 두드러진 음(-)의 관계를 형성함으로서 이 시기에는 부채가 투자를 억제하는 요인인 것으로 분석되었다. 또한 IMF 이후 1998년에는 내부현금흐름이 투자지출에 큰 영향을 미치지 않았으며, 투자기회가 적은 기업에서만 부채의 계수가 유의적인 음(-)으로 나타나 IMF 이전과는 다른 양상을 보였다.

• The Korean Journal of Financial Management
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• v.24 no.1
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• pp.59-83
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• 2007

In this paper, we test empirically free cash flows hypothesis about stock repurchase. The main results of this study can be summarized as follows. First, repurchasing firms do not experience a growth in profitability relative to their peer firms. Second, repurchasing firms experience a contraction in their investment opportunity, and so capital expenditures and cash reserves decline after the repurchase. Third, repurchasing firms experience a decline in systematic risk and investments and in their cost of capital. Fourth, the reduction in profitability and cost of capital are sources of the positive market reaction to the repurchase announcement. And the market reaction to stock repurchase announcements is stronger among those firms that are more likely to overinvest. Conclusively, these results support free cash flows hypothesis. When firms experience a decline in profitability, capital expenditures and cash reserves, systematic risk and cost of capital, they decide to repurchase stocks to reduce free cash flows.

• The Korean Journal of Financial Management
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• v.25 no.4
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• pp.25-51
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• 2008

In this paper, we analyse empirically the fixed asset investment smoothing of working capital of firms listed on Korea Securities Market. The main results of this study can be summarized as follows. Firms will seek to lower long-term cost by smoothing fixed asset investment and maintaining stationary investment with working capital. Working capital is not only an important use of fund, but also a source of liquidity that should be used to smooth fixed asset investment relative to cash flow shocks if firms face financial constraints. Working capital investment is more sensitive than fixed asset investment to cash flow fluctuations. If firms face financial constraints, working capital investment will compete with fixed asset investment for the limited pool of available cash flows. So, fixed asset investment will have negative relationship with working capital investment. However, criticism that the positive correlation between cash flows and fixed asset investment could arise simply because cash flows is proxy variable for investment demand. Finally, controlling for the fixed asset investment smoothing effects of working capital results in a much larger estimate of the long run impact of financial constraints. Financial constraints is measured by dividend payout ratio and market access level. Fazzari et al. (1988), Fazzari and Petersen (1993), and Faulkender et al. (2008) emphasize that low dividend firms or market unaccessible firms are more likely to face financial constraints, and rarely make use of new equity issuing. The results from empirical analysis show that financial constraints can be better explained using 'adjustment cost' concept. Specifically, the results show that financial constraints exist and that in order to measure financial constraint effects more succinctly, fixed asset investment smoothing effects with working capital should be considered.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• 2004.11a
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• pp.423-426
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• 2004

Costs of public rental housing development project consist on various kinds of profits and expenses such as national housing fund, rental cost, construction cost, financing cost. Therefore, project would not be executed without minute management and precise prediction about each item. Cash (low prediction and analysis are necessary to grasp current situation of project, because construction project which is conducted for a long period has fluent risks and inflows and outflows of cash. Although cash flow analysis has been conducted, cash flow has never been expected and managed. General matters to expect cash flow can be known by actual results and literatures. Hut there is no thesis which is studied about risk to enhance precision of expectation of cash flow. As existing thesises studied the risk about whole project, we haven't known precise relations of cash flow and project. Therefore, in this study, we are supposed to analysis and distinguish risk facts which can affect each item of cash flow for precise cash flow expectation and management of public rental housing development project.

• The Korean Journal of Financial Management
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• v.19 no.2
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• pp.111-134
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• 2002

본 연구에서는 건설업종에 특화된 신용평가 모형을 개발하여 건설업종에 대한 부도 예측력를 제고하고자 하였다. 건설업은 여타 업종과는 다른 재무적 특성을 지니고 있다. 특히, 재무적 안정성이 취약하고 자산의 대부분이 매출채권, 재고자산으로 구성되어 유동성이 극히 낮은 실정이다. 본 연구는 이러한 건설업종의 특성을 충분히 감안한 신용평가 모형을 개발하고자 한것이다. 신용평가 모형 중 그 현실적 유용성이 높아 많이 이용되어 오던 신용평점 모형을 개발하였다. 총 2,475개 건설업체를 대상으로 모형구조 및 각종 계량지표 및 비계량지표에 대한 분석을 주로 평균차이 검증과 로짓분석에 의거 선정하였다. 그 결과 새로운 신용평점 모형은 매출액 경상이익률, 총 현금흐름 대 차입금 비율 등 9개의 재무지표와 5분류의 비재무지표로 구성되었다. 이 모형을 기존의 신용평점모형과 비교한 결과 신규모형의 변별력이 높은 것으로 나타났다. 본 연구가 제시한 신용평점모형과 그 개발 방법이 향후 금융기관들의 부실을 줄이고 결과적으로 수익성을 개선하는데 일조하리라 기대된다.