• Korea Real Estate Review
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• v.27 no.3
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• pp.23-40
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• 2017

This study examined the motive and incentive for the disposal and purchase of corporate real estate assets based on the various firm characteristics. It was empirically found that firms with a higher leverage ratio, lower cash holdings, and lower sales growth are more likely to dispose of their real estate assets. This implies that financial constraints, internal reserves, and growth opportunities are important factors affecting the corporate decisions regarding the disposal of real estate assets. Meanwhile, it was found that firms with a lower leverage ratio have a higher probability of purchasing real estate assets, suggesting that a stable financial structure enables firms to acquire more of such assets. Using the transaction amount of corporate real estate assets, consistent results were found. While varied opinions on the utilization of corporate real estate assets have been raised, this study broadened the understanding of such by performing rigorous analyses. The result of this study would have practical implications in terms of the introduction of regulations or the establishment of business strategies related to corporate real estate assets.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.6
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• pp.59-76
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• 2019

Most technology-based entrepreneurship(TBE) go through an process of decline or disappear without overcoming the valley of death(VoD). The purpose of this study is to identify the growth dimension of TBE and to test the influence of firms activities on firms growth over time. This study identified the two-dimensional growth dimension divided by size and profit through exploratory factor analysis(EFA) of a number of growth indicators. Then, we defined the discrete state of growth firm in four states, divided by size and profit, and five states, including the closure of business. Multi-nomial logit model is used to predict the effect of TBE activities on a discrete state of growth firm(size×profit, closure of business) based on multiple independent variables. The independent variables are based on five representative firms activities: employment, marketing, R&D, financial activities, and general management activities. The growth stage of TBE over time has been categorized into three stages: early stage, middle stage, and late stage of business, taking into account the main periods during which the survival rate of startups sharply decreases. The analytical data of this study was based on the secondary data of the start-up supporting companies of government and public institutions. The subjects of analysis were TBE within 10 years. As a result of the empirical analysis, the employment and marketing activities of TBE show that early and mid-term activities had an effect on the state of firms growth. However, if there is a difference, employment activities have both positive and negative effects, while marketing activities have only a positive effect on size and profit growth. And besides, R&D activities, financial activities, and general management activities throughout the entire process of firms growth were found to be firms activities that have both positive and negative effects on firms growth. In addition, the age of the founder, the firms' industry, and the geographic location of the firms, which are general characteristics of the company, were found to have a distinctive effect on the growth status of the firms according to the growth stage.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.19 no.3
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• pp.155-172
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• 2024

The COVID-19 pandemic not only posed an enormous human crisis, but also had a profound impact on firms' survival. Social distancing and global lockdown measures designed to protect human lives have paradoxically impaired the business environment. As a result, firms that sought to gain competitive advantage by leveraging external resources were cut off from the external world and faced unexpected challenges. Under these circumstances, researches were conducted in the early stage of the pandemic to explore how certain firms survived while others fell, but they were limited to re-examining business performance using traditional financial factors. However, this study aims to investigate the role of entrepreneurs' competency in crisis situations from the Resource-Based View (RBV), as such competency plays an important role in improving business performance and subsequently the probability of startups' survival. Specifically, we evaluated the performance as of end of 2019 of 1,127 startups evaluated by the Korea Technology Finance Corporation (KOTEC), which provides policy financing based on technology assessment, in 2016. We then conducted an empirical study to determine the mediating role of business performance in the relationship between entrepreneurial competencies and firm survival by verifying how many of the sample firms were still in operation at the end of June 2023, when the Korean government declared COVID-19 as an endemic. For this purpose, we defined technological, financial, and marketing competencies as the sub-factors of entrepreneurial competency, and sales growth rate and employment growth rate as the sub-factors of business performance. The results of the empirical analysis showed that technological and financial competencies of the entrepreneur had a positive impact on both business performance and firm survival, and that sales growth rate and employment growth rate mediated the relationship between technological competence and firm survival. However, the positive influence of entrepreneurs' financial competence of the survival of startups was only evident through the growth of employment. This study is the first study in South Korea to define the survival factors of startups in the context of the COVID-19 pandemic, and is expected to contribute to the theoretical and practical discussions on the importance of entrepreneurs' competency as a firms' survival factor based on RVB.

• The Journal of Industrial Distribution & Business
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• v.11 no.1
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• pp.39-47
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• 2020

Purpose: This study investigated the effects of valuation errors on the capital market through the earnings forecasting errors of financial analysts. As a follow-up to Jensen (2005)'s study, which argued of agency cost of overvaluation, it was intended to analyze the effect of valuation errors on the earnings forecasting behavior of financial analysts. We hypothesized that if the manager tried to explain to the market that their firms are overvalued, the analysts' earnings forecasting errors would decrease. Research design, data and methodology: To this end, the analysis period was set from 2011 to 2018 of KOSPI and KOSDAQ-listed markets. For overvaluation, the study methodology of Rhodes-Kropf, Robinson, and Viswanathan (2005) was measured. The earnings forecasting errors of the financial analyst was measured by the accuracy and bias. Results: Empirical analysis shows that the accuracy and bias of analysts' forecasting errors decrease as overvaluation increase. Second, the negative relationship showed no difference, depending on the size of the auditor. Third, the results have not changed sensitively according to the listed market. Conclusions: Our results indicated that the valuation error lowered the financial analyst earnings forecasting errors. Considering that the greater overvaluation, the higher the compensation and reputation of the manager, it can be interpreted that an active explanation of the market can promote the accuracy of the financial analyst's earnings forecasts. This study has the following contributions when compared to prior research. First, the impact of valuation errors on the capital market was analyzed for the domestic capital market. Second, while there has been no research between valuation error and earnings forecasting by financial analysts, the results of the study suggested that valuation errors reduce financial analyst's earnings forecasting errors. Third, valuation error induced lower the earnings forecasting error of the financial analyst. The greater the valuation error, the greater the management's effort to explain the market more actively. Considering that the greater the error in valuation, the higher the compensation and reputation of the manager, it can be interpreted that an active explanation of the market can promote the accuracy of the financial analyst's earnings forecasts.

• Journal of the Economic Geographical Society of Korea
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• v.6 no.2
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• pp.377-402
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• 2003

This study aims at analysing basic operational grounds of regional financial institutions in Pusan. Since 1980s many papers have discussed the issues how to develop the regional financial market. But they have neglected regional financial institutions and failed to clarify their roles in the regional economy. Recently the central government expels many regional financial institutions under financial distresses from the regional financial market without assessing their roles in the regional economy. This paper shows that regional financial institutions are indispensible for the stability and development of the regional economy, especially because they can supply credit to the small firms and households which have vulnerable credit standings and are tightly constrained in their access to bank credit. This paper also examines how credit unions deal with the problems caused by asymmetric information after the collapse of solidarity.

• Korean Journal of Social Welfare
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• v.57 no.4
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• pp.321-342
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• 2005

The finance of the National Health Insurance(NHI) in nearly every Nation in the world has been traditionally based on premiums of the workers and employers. But in Korea, the government has been guaranteeing financial supports to regional health corporations. After the unification of the different corporations in the NHIC, the government will not have to give financial support to the NHIC. Then this will be a serious financial challenge to NHIC, which has usually had financial deficit. The purpose of this paper is to review the problems of the premium based financing of the NHI and to exam whether such problems will be solved through the financial support from the state to the NHI. The analysis in this paper focused on five viewpoints; 1) work relatedness 2) redistribution effect 3) financial burden of business firms through the premium 4) risk pooling 5) management hegemony of the NHI. As a result, it was found that there are many problems in every five aspects and these problems could be solve through the financial aid from the state. But, it does not without any restriction mean to suggest that the financing mode of the korean NHI should be wholly transformed to a tax based financing mode. Because there are many things to be considered in oder to alter the financing mode of the NHI. Nevertheless, this paper would give a logical background to enlarge the financial aid form the state to NHI, or at least, to maintain it at a present level.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.5 no.4
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• pp.1-34
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• 2010

Recently, failure rates of Kosdaq IPO firms are increasing and their survival rates tend to be very low, and when these firms do fail, often times backed by a number of governmental financial supports, they may inflict severe financial damage to investors, let alone economy as a whole. To ensure investors' confidence in Kosdaq and foster promising and healthy businesses, it is necessary to precisely assess their intrinsic values and survivability. This study investigates what contributed to the failure of IPO firms and analyzed how these elements are factored into corresponding firms' stock returns. Failure risks are assessed at the time of IPO. This paper considers factors reflecting IPO characteristics, a firm's underwriter prestige, auditor's quality, IPO offer price, firm's age, and IPO proceeds. The study further went on to examine how, if at all, these failure risks involved during IPO led to post-IPO stock prices. Sample firms used in this study include 98 Kosdaq firms that have failed and 569 healthy firms that are classified into the same business categories, and Logit models are used in estimate the probability of failure. Empirical results indicate that auditor's quality, IPO offer price, firm's age, and IPO proceeds shown significant relevance to failure risks at the time of IPO. Of other variables, firm's size and ROA, previously deemed significantly related to failure risks, in fact do not show significant relevance to those risks, whereas financial leverage does. This illustrates the efficacy of a model that appropriately reflects the attributes of IPO firms. Also, even though R&D expenditures were believed to be value relevant by previous studies, this study reveals that R&D is not a significant factor related to failure risks. In examing the relation between failure risks and stock prices, this study finds that failure risks are negatively related to 1 or 2 year size-adjusted abnormal returns after IPO. The results of this study may provide useful knowledge for government regulatory officials in contemplating pertinent policy and for credit analysts in their proper evaluation of a firm's credit standing.

• KDI Journal of Economic Policy
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• v.28 no.2
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• pp.239-262
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• 2006

The paper suggests that there has been a shift in the allocation of bank credit from large firms to small firms before and after the economic crisis. The paper also suggests that the improved lending practices of financial institutions, at least partially, contributed to this shift of corporate loans from large firms to small firms. Comparing the periods before and after the economic crisis also suggests that some important changes occurred to the corporate bond market. The effect of firm size on the corporate bond market differs before and after the economic crisis. Before the crisis, the larger the firms, the more they could borrow in the corporate bond market. However, after the crisis, it is not the case. The following interpretation could be put forward. Before the crisis, investors in the corporate bond market expected that the government would rescue large firms if they face the risk of bankruptcies. However, the collapse of Daewoo Group in 1999 shattered the TBTF (Too Big To Fail) myth of the public. The liquidity crisis of Hyundai Group in 2000-2001 reinforced the disintegration of the TBTF myth.

• Journal of the Korean Society of Costume
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• v.34
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• pp.135-150
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• 1997

The purpose of this study was to inves-tigate the economic performance of the textile industry for the Korean traditional clothes. The content of this paper had two pars; The first part was for the macroeconomic aspects such as location production employments and the produc-tion facilities of the textile industries. The second part was for the microeconomic aspects such as business type branding method fabric type R&D efforts sourc-ing and the distributional channel The major results were as follows: 1.) Most textile firms for the korean traditional clothes were located in Gongju for man-made fibers and in Jinju for silk fabrics. 2) The size of the textile industry in terms of the number of business produc-tion amount the number of employee de-creased during 1994 and 1995 due to the decreasing demand. 3) Over the half of the textile firms produced raw fabric products while only 20% of them were involved in additional dyeing and /or printing finish which re-sulted in low value added production 4) The R&D effort of the textile indus-try for the Korean traditional clothes was very low due to the market uncertainty lack of technological knowledge and most of all small size of the firms 5) Most raw materials for the textile in -dustry were imported with high(25%) tariff rates resulting in price increase and thus low competitiveness in the market. 6) The textile producers sole about the 70% of their products to the wholesalers while selling the rest to the retailers di-rectly. This showed the dual structure of the distribution channel in the textile products. These results suggested some implica-tions for the firms the policy makers and the researchers. The firms should develop new and improved products to increase and create consumer demand by intensive R&D efforts. The government policy ma-kers should give financial supports the firms with R&D investment and legal help such as lowing tariff rate for the raw ma-terials. The researchers from the academy could help the textile industry with the advanced technological knowledge and up-date information for the consumer fashion demand.

• Journal of Distribution Science
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• v.14 no.12
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• pp.129-139
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• 2016

Purpose - This paper examines the explanatory power of the agency theory in the determination of cash holdings for Korean retail firms. If the agency theory holds, a firm with strong corporate governance structure tends to have low cash holdings. A strong governance structure makes the CEO of this firm to behave in the interests of shareholders and thus the CEO has low incentive to stockpile cash holdings, which can be easily diverted for the CEO's own managerial purposes. We investigate this relationship between corporate governance structure and cash holdings, by using corporate governance scores as a proxy variable that captures the effectiveness of corporate governance mechanism. Research design, data, and methodology - We adopt the sample of publicly listed retail firms in KOSPI market from 2005 to 2013. Financial and accounting statements are gathered from the WISEfn database. We also use the corporate governance scores published by Korean Corporate Governance Service. The relationship between the corporate governance scores and cash holdings is cross-sectionally estimated based on the ordinary least square method. This estimation method is widely accepted in the existing literature. The sample of large conglomerates, Chebol, and the remainder firms are separately examined as well, to account for the distinctive internal financing environment in these large conglomerates. Results - We mainly contribute to the extant literature by providing empirical evidence against the agency theory of cash policy. Unlike the prediction of agency theory, we confirm statistically insignificant or even positive correlations between the set of corporate governance scores and cash-asset ratios. Almost all the major corporate governance attributes including total score, shareholder rights, board structure, and the quality of information disclosure do not show negative correlations with cash holdings, which poses a strong challenge to the validity of the agency theory in the determination of retail firms' cash holdings. Conclusions - This study presents interesting empirical results with respect to the cash policy in Korean retail firms. Consistent to prior studies, I verify that the agency theory only limitedly explains the level of cash holdings. Future studies may obtain more robust results by examining a longer sample period.