• Journal of the Korean Operations Research and Management Science Society
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• v.39 no.2
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• pp.67-82
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• 2014

The purpose of this study is two-fold : the one is to examine the causal relationship between domestic large firms' win-win growth effort and their financial performance by fiscal years; and the other is to develop a quantitative win-win growth index to overcome the limitation of the current one mainly using a survey method developed by NCCP (National Commission for Corporate Partnership). To serve the first purpose, we take a sample of 128 large companies whose win-win growth indices as of year 2011 and 2012 were evaluated by NCCP. We use their respective fiscal year's financial data to select 62 candidate financial ratios, which are then used in subsequent empirical tests. For the tests, we employ ordered probit model with stepwise selection method and two-way ANOVA with randomized block design to identify which of the 62 financial ratios are statistically significant ones to affect the firms' win-win growth index as well as to determine if the firms' win-win growth effort would cause their financial performance positively. To serve the second purpose, we devise a model using the 123 firms' 45 financial ratios, which employs ordered probit model with stepwise selection, and the validation of the model follows. We claim that the model suggested in this study serve as an alternative complementing the current one as it can produce the index in a more objective and swift manner using the firms' publicized financial statements.

• The Journal of Industrial Distribution & Business
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• v.9 no.5
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• pp.37-46
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• 2018

Purpose - This paper explores the determinants of bank lending to firms during and after the global financial crisis using firm- and bank-level data to answer the questions what caused the contraction of lending to firms despite the loosening monetary policy during this crisis period. Research design, data, and methodology - We investigate the effects of the monetary policy that followed the global financial crisis on firms borrowing. We use a dynamic panel model to address how firms lending respond to monetary policy. The data are obtained from CRETOP and we consider the manufacturing sector for the analysis to control for unobserved heterogeneity such as industry-specific shocks. Results - The findings from the empirical analysis suggest that both bank- and firm-level characteristics are significant determinants of bank lending. Especially, we find that corporate risk, measured by default risk, is one of the key factors that led to a decline in lending during the crisis. Conclusions - This paper shows that companies borrow more from liquid banks, and high bank capital can also contribute to an increase in a firm's borrowing from banks. Especially, the results confirm that the default rate measured at the firm level has increased during and after the global financial crisis, which implies that default risk interplays with other firm and bank-level characteristics.

• East Asian Economic Review
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• v.18 no.4
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• pp.395-423
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• 2014

This study examines the role of trade finance in the trade collapse of 2008-09 from the perspective of the Korean economy. We use two approaches. Firstly, as background to a more formal analysis, we make a casual observation on the behavior of aggregate data on trade finance, on which Korea has relatively abundant data. Aggregate data do not convincingly support the view that trade finance played an active role in causing the trade collapse. The measures of trade finance and the value of trade both dropped sharply, but the ratio of trade finance over trade was stable and in some cases increased during the crisis period. Secondly, using quarterly data on listed firms in Korea, we conduct panel estimations to test whether firms that are more dependent on external finance experienced greater export contraction during the crisis. Our regression analysis suggests that the financial vulnerability of firms, measured by various financial ratios, did not contribute to export contraction during the financial crisis. This observation largely applies even to smaller firms, who are usually thought of as being more vulnerable financially. However, we find that small exporters that relied heavily on cross-border trade payables or receivables suffered larger drops in export growth during the crisis.

• Journal of Information Technology Applications and Management
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• v.30 no.5
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• pp.83-105
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• 2023

The purpose of this study was to investigate the impact of investment fund attributes such as fund product characteristics, returns on fund investment (ROI), internal controls, and after service on fund investor behavior based on investment information technology. In addition, we also examined how customers reinvest through emotional immersion, company trust and company satisfaction of investment firms in the context of fund investment. First, empirical results show that fund product characteristics, returns on fund investment, and financial firms' internal controls and after service act as signals to fund investors to shape their reinvestment intentions. Second, while investors are generally perceived to be interested only in investment returns, this study also shows that they consider both fund product characteristics and fund investment returns, which are core attributes of funds, as well as financial firms' internal control and after service, which are non-core attributes. Third, we find that company trust is an important factor in investors' reinvestment intentions, showing that investors are more likely to reinvest in a fund if they perceive the financial firm to be trustworthy and reliable. Finally, these findings emphasize that investors consider not only tangible aspects of fund products, such as fund product characteristics and returns on fund investment, but also intangible factors, such as financial firms' internal control and after service, and trustworthiness. Taken together, another implication is that the more advanced the investment information technology of financial firms, the more trust, satisfaction, immersion, and reinvestment intentions of investors will increase.

• Korean small business review
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• v.31 no.4
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• pp.67-93
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• 2009

The purpose of this paper is to explore the relations between financial constraints and dividend smoothing of innovative small and medium sized enterprises(SMEs) listed on Korea Securities Market and Kosdaq Market of Korea Exchange. The innovative SMEs is defined as the firms with high level of R&D intensity which is measured by (R&D investment/total sales) ratio, according to Chauvin and Hirschey (1993). The R&D investment plays an important role as the innovative driver that can increase the future growth opportunity and profitability of the firms. Therefore, the R&D investment have large, positive, and consistent influences on the market value of the firm. In this point of view, we expect that the innovative SMEs can adjust dividend payment faster than the noninnovative SMEs, on the ground of their future growth opportunity and profitability. And also, we expect that the financial unconstrained firms can adjust dividend payment faster than the financial constrained firms, on the ground of their financing ability of investment funds through the market accessibility. Aivazian et al.(2006) exert that the financial unconstrained firms with the high accessibility to capital market can adjust dividend payment faster than the financial constrained firms. We collect the sample firms among the total SMEs listed on Korea Securities Market and Kosdaq Market of Korea Exchange during the periods from January 1999 to December 2007 from the KIS Value Library database. The total number of firm-year observations of the total sample firms throughout the entire period is 5,544, the number of firm-year observations of the dividend firms is 2,919, and the number of firm-year observations of the non-dividend firms is 2,625. About 53%(or 2,919) of these total 5,544 observations involve firms that make a dividend payment. The dividend firms are divided into two groups according to the R&D intensity, such as the innovative SMEs with larger than median of R&D intensity and the noninnovative SMEs with smaller than median of R&D intensity. The number of firm-year observations of the innovative SMEs is 1,506, and the number of firm-year observations of the noninnovative SMEs is 1,413. Furthermore, the innovative SMEs are divided into two groups according to level of financial constraints, such as the financial unconstrained firms and the financial constrained firms. The number of firm-year observations of the former is 894, and the number of firm-year observations of the latter is 612. Although all available firm-year observations of the dividend firms are collected, deletions are made in the case of financial industries such as banks, securities company, insurance company, and other financial services company, because their capital structure and business style are widely different from the general manufacturing firms. The stock repurchase was involved in dividend payment because Grullon and Michaely (2002) examined the substitution hypothesis between dividends and stock repurchases. However, our data structure is an unbalanced panel data since there is no requirement that the firm-year observations data are all available for each firms during the entire periods from January 1999 to December 2007 from the KIS Value Library database. We firstly estimate the classic Lintner(1956) dividend adjustment model, where the decision to smooth dividend or to adopt a residual dividend policy depends on financial constraints measured by market accessibility. Lintner model indicates that firms maintain stable and long run target payout ratio, and that firms adjust partially the gap between current payout rato and target payout ratio each year. In the Lintner model, dependent variable is the current dividend per share(DPS_t), and independent variables are the past dividend per share(DPS_t-1) and the current earnings per share(EPS_t). We hypothesized that firms adjust partially the gap between the current dividend per share(DPS_t) and the target payout ratio(Ω) each year, when the past dividend per share(DPS_t-1) deviate from the target payout ratio(Ω). We secondly estimate the expansion model that extend the Lintner model by including the determinants suggested by the major theories of dividend, namely, residual dividend theory, dividend signaling theory, agency theory, catering theory, and transactions cost theory. In the expansion model, dependent variable is the current dividend per share(DPS_t), explanatory variables are the past dividend per share(DPS_t-1) and the current earnings per share(EPS_t), and control variables are the current capital expenditure ratio(CEA_t), the current leverage ratio(LEV_t), the current operating return on assets(ROA_t), the current business risk(RISK_t), the current trading volume turnover ratio(TURN_t), and the current dividend premium(DPREM_t). In these control variables, CEA_t, LEV_t, and ROA_t are the determinants suggested by the residual dividend theory and the agency theory, ROA_t and RISK_t are the determinants suggested by the dividend signaling theory, TURN_t is the determinant suggested by the transactions cost theory, and DPREM_t is the determinant suggested by the catering theory. Furthermore, we thirdly estimate the Lintner model and the expansion model by using the panel data of the financial unconstrained firms and the financial constrained firms, that are divided into two groups according to level of financial constraints. We expect that the financial unconstrained firms can adjust dividend payment faster than the financial constrained firms, because the former can finance more easily the investment funds through the market accessibility than the latter. We analyzed descriptive statistics such as mean, standard deviation, and median to delete the outliers from the panel data, conducted one way analysis of variance to check up the industry-specfic effects, and conducted difference test of firms characteristic variables between innovative SMEs and noninnovative SMEs as well as difference test of firms characteristic variables between financial unconstrained firms and financial constrained firms. We also conducted the correlation analysis and the variance inflation factors analysis to detect any multicollinearity among the independent variables. Both of the correlation coefficients and the variance inflation factors are roughly low to the extent that may be ignored the multicollinearity among the independent variables. Furthermore, we estimate both of the Lintner model and the expansion model using the panel regression analysis. We firstly test the time-specific effects and the firm-specific effects may be involved in our panel data through the Lagrange multiplier test that was proposed by Breusch and Pagan(1980), and secondly conduct Hausman test to prove that fixed effect model is fitter with our panel data than the random effect model. The main results of this study can be summarized as follows. The determinants suggested by the major theories of dividend, namely, residual dividend theory, dividend signaling theory, agency theory, catering theory, and transactions cost theory explain significantly the dividend policy of the innovative SMEs. Lintner model indicates that firms maintain stable and long run target payout ratio, and that firms adjust partially the gap between the current payout ratio and the target payout ratio each year. In the core variables of Lintner model, the past dividend per share has more effects to dividend smoothing than the current earnings per share. These results suggest that the innovative SMEs maintain stable and long run dividend policy which sustains the past dividend per share level without corporate special reasons. The main results show that dividend adjustment speed of the innovative SMEs is faster than that of the noninnovative SMEs. This means that the innovative SMEs with high level of R&D intensity can adjust dividend payment faster than the noninnovative SMEs, on the ground of their future growth opportunity and profitability. The other main results show that dividend adjustment speed of the financial unconstrained SMEs is faster than that of the financial constrained SMEs. This means that the financial unconstrained firms with high accessibility to capital market can adjust dividend payment faster than the financial constrained firms, on the ground of their financing ability of investment funds through the market accessibility. Futhermore, the other additional results show that dividend adjustment speed of the innovative SMEs classified by the Small and Medium Business Administration is faster than that of the unclassified SMEs. They are linked with various financial policies and services such as credit guaranteed service, policy fund for SMEs, venture investment fund, insurance program, and so on. In conclusion, the past dividend per share and the current earnings per share suggested by the Lintner model explain mainly dividend adjustment speed of the innovative SMEs, and also the financial constraints explain partially. Therefore, if managers can properly understand of the relations between financial constraints and dividend smoothing of innovative SMEs, they can maintain stable and long run dividend policy of the innovative SMEs through dividend smoothing. These are encouraging results for Korea government, that is, the Small and Medium Business Administration as it has implemented many policies to commit to the innovative SMEs. This paper may have a few limitations because it may be only early study about the relations between financial constraints and dividend smoothing of the innovative SMEs. Specifically, this paper may not adequately capture all of the subtle features of the innovative SMEs and the financial unconstrained SMEs. Therefore, we think that it is necessary to expand sample firms and control variables, and use more elaborate analysis methods in the future studies.

• The Korean Journal of Applied Statistics
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• v.29 no.2
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• pp.389-398
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• 2016

In this paper, we examine the financial performance of credit guarantee programs. We compared financial performance of guaranteed firms of KODIT and non-guaranteed firms. The of covariate adjusted propensity score method is used because a selection bias problem could occur if t-test or regression analysis were used. The results show that a credit guarantee program enhances the financial performance of beneficiary firms.

• Asia pacific journal of information systems
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• v.22 no.1
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• pp.53-77
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• 2012

Financial firms, especially large scaled firms such as KB bank, NH bank, Samsung Card, Hana SK Card, Hyundai Capital, Shinhan Card, etc. should be securely dealing with the personal financial information. Indeed, people have tended to believe that those big financial companies are relatively safer in terms of information security than typical small and medium sized firms in other industries. However, the recent incidents of personal information privacy invasion showed that this may not be true. Financial firms have increased the investment of information protection and security, and they are trying to prevent the information privacy invasion accidents by doing all the necessary efforts. This paper studies how effectively a financial firm will be able to avoid personal financial information privacy invasion that may be deliberately caused by internal staffs. Although there are several literatures relating to information security, to our knowledge, this is the first study to focus on the behavior of internal staffs. The big financial firms are doing variety of information security activities to protect personal information. This study is to confirm what types of such activities actually work well. The primary research model of this paper is based on Theory of Planned Behavior (TPB) that describes the rational choice of human behavior. Also, a variety of activities to protect the personal information of financial firms, especially credit card companies with the most customer information, were modeled by the four-step process Security Action Cycle (SAC) that Straub and Welke (1998) claimed. Through this proposed conceptual research model, we study whether information security activities of each step could suppress personal information abuse. Also, by measuring the morality of internal staffs, we checked whether the act of information privacy invasion caused by internal staff is in fact a serious criminal behavior or just a kind of unethical behavior. In addition, we also checked whether there was the cognition difference of the moral level between internal staffs and the customers. Research subjects were customer call center operators in one of the big credit card company. We have used multiple regression analysis. Our results showed that the punishment of the remedy activities, among the firm's information security activities, had the most obvious effects of preventing the information abuse (or privacy invasion) by internal staff. Somewhat effective tools were the prevention activities that limited the physical accessibility of non-authorities to the system of customers' personal information database. Some examples of the prevention activities are to make the procedure of access rights complex and to enhance security instrument. We also found that 'the unnecessary information searches out of work' as the behavior of information abuse occurred frequently by internal staffs. They perceived these behaviors somewhat minor criminal or just unethical action rather than a serious criminal behavior. Also, there existed the big cognition difference of the moral level between internal staffs and the public (customers). Based on the findings of our research, we should expect that this paper help practically to prevent privacy invasion and to protect personal information properly by raising the effectiveness of information security activities of finance firms. Also, we expect that our suggestions can be utilized to effectively improve personnel management and to cope with internal security threats in the overall information security management system.

• International Area Studies Review
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• v.22 no.3
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• pp.121-148
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• 2018

This paper examines the role of accounting conservatism on investment expenditure for non-financial Korean listed firms around the 2007-2008 global financial crisis using a differences-in-differences design. Specifically, this paper examines the association between an ex ante classification of firms by their level of accounting conservatism prior to the credit crisis and the ex post magnitude of the decline in investment. Consistent with prior literature, this study found that firms experienced a decline in their investment when hit by the financial crisis (Campello et al. 2010). And also this study found that firms with more conservative financial reporting experienced a smaller decline in investment activity following the financial crisis than did firms with less conservative financial reporting. Together, the results suggest that negative shocks to the supply of external finance hampers firm-level investment and that conservative financial reporting can lessen the sensitivity of firms' investment to such negative shocks. Next, this study shows that the magnitude of our findings is greater for firms more likely to suffer from underinvestment (as opposed to overinvestment). Firms that are financially constrained or have greater demand for external finance are more likely to experience underinvestment. Consistent with the predictions, this study finds stronger benefits of conservatism for firms that face relatively greater costs in raising external capital (i.e., financially constrained firms) or that have a relatively greater need to do so (i.e., firms that lack internal financial resources). This study also finds that the role for conservatism is greater in firms with a higher level of information asymmetry, consistent with the notion that conservatism mitigates financing frictions arising from information problems.

• The Journal of Information Systems
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• v.16 no.4
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• pp.269-286
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• 2007

Business Incubators(BI) guide starting-up firms through their growth process and as such constitute a strong instrument to promote innovation and entrepreneurship. This study classified the incubating services into communication, physical facilities, human resources, marketing, financial, legal, technology, and networking services. The research problem was tested with data from 103 BI centers and 561 starting-up firms in BI. The results from the survey are as follows: First, incubating services to important for the BI's performance are networking, communication, human resources, physical facilities, and marketing services. Second, the incubating services to satisfy on the firms in the BI are financial, human resources, marketing, communication, networking, and physical facilities services. Third, there are the differences between BI center and the firms in the BI by each incubating service except communication service. Finally, the results of MSEM(Multi-group Structured Equation Modeling) indicate the communication and networking services are more strongly affected to the performance at the BI centers. Vice versa, the marketing and financial services are more strongly affected to the satisfaction at the firms in the BI centers. Starting-up firms in business incubators showed strong desire to receive better support in such fields as marketing and financial services. BI needs to recognize such demand and provide improved services in such areas. Starting-up firms did not recognize the utility and importance of services in networking with other firms and supporting human resources. BI needs to promote services in such areas. Concerning communication services and physical facility support service, both BI and starting-up firms showed satisfactory levels of services.

• International Journal of Contents
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• v.5 no.1
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• pp.37-45
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• 2009

This paper empirically tests pecking order theory. Korean listed firms are used as the samples. On the whole we find supportive results for pecking order theory. The fixed effect model on the whole period shows that as pecking order theory suggests that debt ratio decreases as cash flow. ROA, physical assets, and firm size increase. Again, it is shown that corporate debt ratio significantly decreases as cash flow or ROA increases in every sub-sample, which coincides with the prediction of pecking order theory. Corporate debt ratio significantly decreases as physical assets or jinn size increases in case of the whole sample, pre-financial crisis period, and the sub-samples by q-ratio, which also supports the prediction of pecking order theory. Statistical significance of the coefficients of physical assets or firm size completely disappears after Korean financial crisis. Perhaps it is because the role of physical assets or firm size as a mitigator of information asymmetry significantly weakens after the financial crisis as Korean financial market becomes more transparent. For small firms only size variable is negatively and significantly related with debt to assets. It seems that size is an important factor for smaller firms in making financing decision.