• Journal of Technology Innovation
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• v.24 no.1
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• pp.143-167
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• 2016

The purpose of this study is to analyze changes of innovation activities and their performance in pre-IPO and post-IPO of KOSDAQ IPO listed companies in medical and pharmaceutical fields, which require high R&D investment, from 2000 to 2005 in Korea. The innovation efficiencies of the IPO companies were measured before and after three years based on the DEA model. The financial data and patent information of the listed company during total 6 years, which were 3 years before IPO and 3 years after IPO, were collected. The main results of this research are as follows. First, it took an average 12.86 years until IPO in the start-up of the IPO companies in the pharmaceutical sector, and innovation was on average more active than the IPO before. R&D investment was higher than the IPO before, and the number of the applied patent during 3 years after IPO was 16.67 which was increased from 8.43 during 3 years before IPO. In addition, the average scope of technology of the IPO companies was expanded from 11 to 22 technology fields during previous 3 year and after 3 year each, and financial growth after IPO was lower than the previous IPO. Second, the financial performance of R&D investment and the performance of patent activity were weakened in the efficiency after the IPO, and the integrated performance from the patenting activities and the R&D investment was decreased after the IPO. Finally, the efficiency of the financial performance of the patenting activity was lower than the efficiency of the financial performance of the patent and R&D investment and patent activities under the R&D investment. In particular, the inefficiency of the firms' patenting activities performance after the IPO was caused by the decreasing return to scale, according to the results of this study. This results implicate that the expansion of R&D investments through the IPO had not lead to the financial performance of the market, and that the overall inefficiency since the IPO is due to the inefficiencies at the stage for the outcome of innovation activity rather than the output obtained through the R&D investments that appear to lead the performance of the market.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.11 no.3
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• pp.1-15
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• 2016

This study has analyzed predication capabilities leveraging multi-variate model, logistic regression model, and artificial neural network model based on financial information of medium-small sized companies list in KOSDAQ. 83 delisted companies from 2009 to 2012 and 83 normal companies, i.e. 166 firms in total were sampled for the analysis. Modelling with training data was mobilized for 100 companies inlcuding 50 delisted ones and 50 normal ones at random out of the 166 companies. The rest of samples, 66 companies, were used to verify accuracies of the models. Each model was designed by carrying out T-test with 79 financial ratios for the last 5 years and identifying 9 significant variables. T-test has shown that financial profitability variables were major variables to predict a financial risk at an early stage, and financial stability variables and financial cashflow variables were identified as additional significant variables at a later stage of insolvency. When predication capabilities of the models were compared, for training data, a logistic regression model exhibited the highest accuracy while for test data, the artificial neural networks model provided the most accurate results. There are differences between the previous researches and this study as follows. Firstly, this study considered a time-series aspect in light of the fact that failure proceeds gradually. Secondly, while previous studies constructed a multivariate discriminant model ignoring normality, this study has reviewed the regularity of the independent variables, and performed comparisons with the other models. Policy implications of this study is that the reliability for the disclosure documents is important because the simptoms of firm's fail woule be shown on financial statements according to this paper. Therefore institutional arragements for restraing moral laxity from accounting firms or its workers should be strengthened.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.9 no.1
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• pp.153-164
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• 2014

This study is to investigate the effects of intangible assets such as research & development, education & training and advertisement on firm values of high-technology firms and low-technology firms listed in the KOSDAQ market, and to analyze the value-relativeness between the audit quality of companies and the expenditure of intangible assets. The substitute measurement of firm values is Tobin's Q model. The sample period for positive analysis is from 2003 to 2008, and the samples, excepting for financial business, are manufacturing companies of closing accounts corporate on December, based on companies of KOSDAQ that are listed in security. Finally, data from about 305 companies are used in this analysis. Followings are the results of the analysis. First, research & development, education & training of high-technology firms have an effect on firm values, and education & training of low-technology have an effect on firm values. Second, we find that audit quality(BIG4) increases the value relevance of R&D expenditures of high-technology firms and audit quality(BIG4) increases the value relevance of education & training expenditures of low-technology firms. This paper is meaningful in that it verified the value-relativeness of cost of intangible assets compared with high-technology firms to low-technology firms.

• The Korean Journal of Financial Management
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• v.24 no.4
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• pp.135-161
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• 2007

In this paper, we study empirically the dividend initiation decisions of IPO firms listed on Korea Securities Market and KOSDAQ Market. Specifically, we study three aspects of dividend initiation decision, (a) dividend initiation decision, (b) dividend level decision, (c) time-to-initiation decision. The main results of this study can be summarized as follows. First, determinants suggested by the major theories of dividends, namely, residual dividend, dividend signaling, agency, catering, and transactions cost theory explain significantly the dividend initiation decision. Second, determinants suggested by the major theories of dividends explain significantly the dividend level decision. So to speak, most of the findings for dividend initiation decision also hold for the dividend level decision. Third, most of the factors that increase(decrease) the probability of dividend initiation reduce(increase) the time-to-initiation. Almost of the dividend initiation firms start paying dividends within two years of the IPO. Thus, if IPO firm does not initiate dividend early in the life of the firm, then it is highly likely that it will never initiate dividend.

• The Journal of the Korea Contents Association
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• v.14 no.12
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• pp.973-988
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• 2014

This study investigated one of the contemporary issues in the Korean capital market and two hypotheses of concern were tested on the financial determinants of profitability for the firms belonging to the Korean chaebols during the era of the post-global financial turmoil. The first hypothesis applying conditional quantile regression (CQR) estimation provided the evidence that leverage ratio, fixed asset utilization, and foreign ownership among the nine quantitative explanatory variables, had overall statistical significance relative to the book-valued profitability measure, while additional variables such as a firm's size, fixed and a proxy for the type of exchange market showed their strong impacts on the market-valued profitability indicator. Concerning the formulated 'extended' DuPont system, only two components of EBITDAEBIT and EMULTIPLIER revealed their prominent influence on ROE (Return on Equity) over the two tested periods (the years 2008 and 2012).

• 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.

• The Korean Journal of Financial Management
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• v.27 no.1
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• pp.89-120
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• 2010

In this paper, we analyse empirically the relations between ownership structure and cash holdings of firms listed on Korea Securities Market and Kosdaq Market of Korea Exchange. The main results of this study can be summarized as follows. Cash holdings increase as large shareholder's equity holdings increase. Cash holdings increase as the difference between first largest shareholder's and second largest shareholder's equity holdings increase, and cash holdings increase as the ownership concentration increase. Managerial ownership exert a non-linear effects on cash holdings. So to speak, at lower level of managerial ownership, managers hold more cash to pursue their own interests at the expense of minority shareholders, but at higher level of managerial ownership, the interests of managers and shareholders are aligned, and also at highest level of managerial ownership, managers hold more cash to pursue their own interests at the expense of minority shareholders. Cash holdings increase larger in owner-controlled firm than in management-controlled firm. These results support the expropriation of minority shareholders hypothesis that large shareholders can extract private benefits from corporate resources under their control at the expense of minority shareholders. This paper contributes to defining information value of large shareholder's equity holdings on cash holdings for a firms' other stakeholders such as investors and creditors, and to strengthening a legal and institutional safeguard for external minority shareholders. Ownership concentration might have negatively affected the evolution of the legal and institutional frameworks for corporate governance and the manner in which economic activity is conducted. It could be a formidable barrier to future policy reform.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.22 no.1
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• pp.275-284
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• 2021

Survival analysis was used to analyze whether there is a difference in the effect of leverage on corporate failure according to the firm size. A total of 25,250 (year-company) companies listed on the Korea Stock Exchange and KOSDAQ market from 1999 to 2019 were analyzed. First, the increase in leverage generally acts as a factor that increases the possibility of corporate failure. On the other hand, the increase in the trade payable ratio lowered the possibility of failure of the company. The increase in corporate trade payable was perceived as a factor in reducing the possibility of corporate failure because it was considered the active development of business activities or active use of interest-free debt rather than leading to an increase in corporate risk. Second, a higher leverage ratio and trade payable ratio in large firms lowered the possibility of corporate failure. In the SMEs, all types of leverage increases are a factor that increases corporate failure. Overall, the effect of leverage on corporate failure differs according to the size of the company.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.22 no.6
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• pp.283-290
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• 2021

Survival analysis was used to determine whether there are differences in the impact of trade payables on business failure according to the size of the company. A total of 41,781 firms from 1999 to 2019 were analyzed. The analysis period was divided into the entire period and before and after the financial crisis. The trade payable ratio is a proxy variable. The increase in trade payables over the entire period increases the possibility of business failure of Small and Medium Enterprises (SMEs). However, in large firms, a significant relationship between the increase in the trade payable ratio and the possibility of corporate failure could not be confirmed. Second, in SMEs during the sub-periods of 1999-2007 and 2009-2019, it was found that an increase in trade payables acts as a factor that increases the possibility of corporate failure. However, in large corporations, the increase in trade payables in the period from 2009 to 2019 has been shown to reduce the rate of failure. An increase in trade payables is recognized as the active development of business activities or the active use of interest-free debt. Therefore, it was confirmed that the impact of trade payables on corporate failure differs depending on the size of the company.

• Journal of Korea Entertainment Industry Association
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• v.15 no.6
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• pp.55-70
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• 2021

This study investigates the following important financial questions using entertainment enterprises: 1) how does cash reserve affect a firm's financial value? 2) what factors influence the level of cash retention of a firm? For empirical tests, we use accounting and financial data of entertainment companies listed in the KOSPI and KOSDAQ markets for a long-term time period covering from 2000 to 2018. The main findings of this paper are as follows: First, entertainment companies maintain higher level of cash holdings compared to non-entertainment companies. Second, the cash holdings of entertainment enterprises have positive influence on firms' financial value. Third, among various firm characteristics known for affecting the cash holdings level, leverage and profitability exhibit strong relationships in entertainment enterprises. Entertainment firms with lower leverage and higher profitability tend to reserve more cash inside them. These findings suggest that entertainment companies are highly valued by stock market participants as having prospective opportunities, thus, firms with sufficient cash holdings tend to have higher firm value. In addition, these findings imply that cash in entertainment enterprises functions as a substitute for debts and the cash holdings are less likely driven by agency problems.