• Asia-Pacific Journal of Business
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• v.14 no.4
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• pp.255-273
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• 2023

Purpose - This study examines whether internal control has an effect on stock price informativeness about future earnings. High quality internal control provides continuous assurance for the quality of financial reports, and these future earnings-related information is accurately reflected in the current stock price. Design/methodology/approach - This study collected 12,862 data from 2006 to 2021 in China to make an empirical analysis using the future earnings response coefficient (FERC) and the multiple regression analysis were hired in order to analyze the data. Findings - We find that internal control strengthens the association between current returns and future earnings, indicating that more information about future earnings is reflected in current stock prices. This positive effect exists in both the main board market and the growth enterprise market of China's stock market, especially in the main board market after the implementation of the internal control policy. In addition, we find that the positive effect is weaker for firms that report internal control deficiencies or receives non unqualified internal control audit opinions. The results using earnings persistence yield similar findings, further supporting the results based on the FERC model. Research Implications or Originality - Our tests provide strong evidence that the quality of internal control affects FERC in China stock market.

• Asia pacific journal of information systems
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• v.18 no.3
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• pp.45-65
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• 2008

The rapid growth of the Internet has increased the amount of transmission of personally identifiable information. At the same time, with new Internet related technologies, organizations are trying to collect and access more personal information than before, which in turn makes individuals concern more about their information privacy. For their successful businesses, organizations have tried to alleviate these concerns in two ways: (1) by offering privacy policies that promise certain level of privacy protection; (2) by offering benefits such as financial gains or convenience. In this paper, we interpret these actions in the context of the information processing theory of motivation. This paper follows Hann et al.(2007)'s methods to analyze Internet users privacy concerns in Korea and tries to compare the findings. Our research objectives are as follows: First, we analyze privacy concern mitigation strategies in the framework of the expectancy theory of motivation. Subsequently, we show how the expectancy theory based framework is linked o the conjoint analysis. We empirically validate the predictions that the means to mitigate privacy concerns are associated with positive valences resulting in an increase in motivational score. In order to accommodate real-life contexts, we investigate these means in trade-off situation, where an organization may only be able to offer partially complete privacy protection and/or promotions and/or convenience, While privacy protection (secondary use, improper access) are associated with positive valences, we also find that financial gains can significantly increase the individuals' motivational score of a website in Korea. One important implication of this empirical analysis is that organizations may possess means to actively manage the privacy concerns of Internet users. Our findings show that privacy policies are valued by users in Korea just as in the US or Singapore. Hence, organizations can capitalize on this, by stating their privacy policy more prominently. Also organizations would better think of strategies or means that may increase online users' willingness to provide personal information. Since financial incentives also significantly increase the individuals' motivational score of website participation, we can quantify the value of website privacy protection in terms of monetary gains. We find that Korean Internet users value the total privacy protection (protection against errors, improper access, and secondary use of personal information) as worthy as KW 25,550, which is about US 28. Having done this conjoint analysis, we next adopt cluster analysis methodology. We identify two distinct segments of Korea's internet users-privacy guardians and information sellers, and convenience seekers. The immediate implication of our study is that firms with online presence must differentiate their services to serve these distinct segments to best meet the needs of segments with differing trade-offs between money and privacy concerns. Information sellers are distinguished from privacy guardians by prior experience of information provision, To the extent that businesses cannot observe an individual's prior experience, they must use indirect methods to induce segmentation by self-selection as suggested in classic economics literature of price discrimination, Businesses could use monetary rewards to attract information sellers to provide personal information. One step forward from the societal trends that emphasize the need of legal protection of information privacy, our study wants to encourage organizations and related authorities to have the viewpoints to consider both importance of privacy protection and the necessity of information trade for the growth of e-commerce.

• Science of Emotion and Sensibility
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• v.11 no.4
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• pp.599-612
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• 2008

Today, communication trend of financial brand has changed fast with more foreign financial brand's introduction, emerging financial brands through the openness. With the trend of changing, companies are introducing various marketing methods to differentiate its brand image. And color marketing becomes an important tool for the differentiation. However, except a few brands, brand color which expresses management character of a company is different from the customer's preferred color which is based on investors' investment tendency. This may be related to the brand Image which is final goal of communication. Therefore, this study suggests effective communication method between company and customers by analyzing preferred color of customers by their investment tendency and comparison analysis security firms' color marketing strategy. As a result, it was found that Roland Barthes symbolic meaning of colors is different from the symbolic meaning of the groups of investor tendency. For example, I assumed that aggressive investors preferred strong color like red or orange, but the survey result was far from my assumption. I hope this study can be a good foundation for logical and scientific marketing in communication between security companies and customers in more open market with introduction to the Capital Market Consolidation Act.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.11 no.2
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• pp.49-62
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• 2016

Technology-based start-ups have great economic ripple effect such as economic growth and job creation. Therefore, a strategic approach is required in order for such start-ups to continuously grow. However, many technology-based start-ups do not survive the Death-Valley and are being eliminated from the market. This is an empirical study on influencing variables that have impact on their performance. This study presents growth intention and influencing variables that have impact on performance (financial performance, technological performance) based on previous research on technology-based start-up. Also, this study examines the relationship between entrepreneurial competence, team commitment and growth intention, and finds the effect of controlling business-network. Structural equation modeling was performed in order to test the research hypothesis. Survey was conducted on the firms that have been certified by Youth Startup Academy of Small and Medium Business Corporation. A total of 306 samples were collected from the survey. An empirical test was conducted on the research hypothesis using SPSS 21.0 and Amos 22.0. The result of hypothesis test shows that growth intention has positive influence on both financial and technological performance, and entrepreneurial competence (technological competence, strategic management competence, creative competence and team commitment) has positive influence on growth intention. Also, the research proved that business-network has regulation effect between human resource trait and growth intention. The result of our study will provide practical insight to future start-ups for continuous growth and successful running of their firm.

• Journal of Distribution Science
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• v.13 no.9
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• pp.95-101
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• 2015

Purpose - This study provides evidence of the impact of the mandatory adoption of Korean equivalents to International Financial Reporting Standards (K-IFRS) on accounting quality. K-IFRS uses fair value as a basis of measurement and is characterized by principle-based standards. These characteristics can lead to a decrease in conservatism. Therefore, this study aims to examine whether or not there is a change in the level of conservatism before and after the enforcement of K-IFRS (2007~2014). By comparing 2007 through 2008 and 2013 through 2014 (excluding 2009 to 2012), we test "the temporary adjustment phenomenon" and document an overall decline in the degree of conservatism after the adoption of K-IFRS. Research design, data, and methodology - Our sample is comprised of data of all listed Korea Composite Stock Price Index (KOSPI) manufacturing distribution companies in Korea from 2007 to 2014, which yields the pooled sample of 4,412 (panel A) and 1,915 (panel B) firm-year observations for hypotheses 1 and 2. In line with recent literature, we adopt the Givoly and Hayn (2000) model, which recomputes the non-operating accruals, excluding two components that are most likely to capture the effect of restructuring activities: special items and gains or losses from discontinued operations. In addition, we also use these variables: SIZE, LEV, INV_CYCLE, ROA, OWN, and FOR. Results - Our sample period spans 2007 to 2014. This offers evidence on the effect of the mandatory adoption of IFRS on conservatism. Our findings can be summarized as follows. First, in panel A, for mandatory K-IFRS adoption (2011), we do not find any significant evidence of conservatism. We can guess that the "temporary adjustment phenomenon" is the reason that we do not find significant evidence of conservatism. Second, we investigate panel B from 2009 to 2012. We document an overall decline in the degree of conservatism after the adoption of K-IFRS. We can assume that these results are due to "the temporary adjustment phenomenon." Conclusions - This study finds that conservatism significantly decreased after IFRS adoption. In particular, this study makes the initial effort to elucidate "the temporary adjustment phenomenon" to analyze the effect of K-IFRS on conservative accounting. We argue that K-IFRS are conceptually conservative but that inappropriate application of the conservatism principles is likely to prevent financial reporting from reaching the level of conservatism targeted by the IASB. Overall, this paper contributes to the literature on IFRS and can be useful to capital market supervisors who are monitoring the trends of the firms implementing K-IFRS. Additionally, our results inform stakeholders of the potentially negative effect of the greater flexibility permitted by IFRS and/or lack of appropriate enforcement on key dimensions of accounting quality. This has important implications for Korean regulators and standard setters as they review the cost and benefits of IFRS. Our study also sheds light on the importance of the institutional environment in achieving the targeted objectives for improving financial reporting quality.

• Journal of Distribution Science
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• v.10 no.3
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• pp.31-42
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• 2012

After the rapidly changing business management environment and financial crisis, high prices and domestic recession in Korea posed threats to the business survival of small and medium enterprises (SMEs). This paper looks at the potential of micro business owners for sustainable development: those who have a spirit of entrepreneurship and the potential to be a hidden champion. Our study of micro business values uses structure equation modeling by LISREL. We have done so in order to understand the foundation of management innovation and success model of micro enterprise by increasing the entrepreneurship and management performance relationship analysis. A micro-enterprise is a type of small business, found only in Korea, often registered as having ten or fewer employees. We examine the successful type of hidden champions and the influence of entrepreneurship on start-ups in business. As compared to past research on the SME entrepreneurship, this study segments small businesses even further. Small business entrepreneurship was classified into three forms that are most appropriate for the Korean situation today: innovation, risk-taking, and pro-activeness. This research is meaningful as it is Korea's first empirical analysis on four business types: wholesale and retail sales, food and lodging business, service business, and manufacturing business. Thus far, research on small business entrepreneurship was carried out using small-scale investigative analysis. However, this research attempted to develop a model that can explain a cause-effect relation of the motivational level when it comes to the difference of entrepreneurship by each business type and small business start-up success factors. Various conceptual and operational definitions could be developed in a diverse and precise manner. Independent variables that are related to the success of small businesses can be developed additionally to examine the success factors related to the systematization in detailed manner. The research showed that the innovation, risk-taking and pro-activeness of the manifested difference in the degree of perception depending on the type of small businesses. Among the four business types, the ones that manifested the highest successful start-up rates were food, service, wholesale and retail sales and manufacturing. Results after conducting the regression analysis are shown on, which proves that the small business entrepreneurship exerts direct effect on the financial management performance of small businesses. In other words, small business entrepreneurship exerts a positive effect on the small business financial success and management performance. The R² value is 0.61. It is possible to know that the perception of systematization and variables on attitude explains the 61% of the success for small self-employed businesses management performance. We define start-up key factors that are helpful to achieve internal growth of firms by finding business survival strategies. The results also focus on Korean government policy for micro enterprise and small business support.

• The Journal of Industrial Distribution & Business
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• v.10 no.5
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• pp.77-86
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• 2019

Purpose - The present study examined the reliability of accounting information based on the pay slice (CPS) information of chief executive officers (CEOs) in the service industry. The difference in the size of CPS under the capitalist system can be used as an index to gauge the influence of top management. Research design, data, and methodology - In accordance with the amendment of the Financial Investment Services and Capital Market Act in 2013, the pay information of individual registered executives with annual salary of more than 500 million won has been disclosed. The sample of the current study is 232 companies listed on the Korea Exchange excluding financial services from 2013 to 2015, when the individual pay-slice information for registration officers was published in the business report in accordance with the revision of the Capital Market Act. The financial data required for this study were extracted from the FnGuide and the TS-2000. With the data, we tested the relationship between CPS and accounting information reliability through a linear regression analysis. Results - The first result showed that the relationship between the CPS and human resource in internal accounting control system in the service industry is significantly negative only with the accounting department personnel. This result implied that the CEO can negatively affect the retention of the accounting department in the firm. Second, both the CPS and quality of audit in the service industry are negatively related both to audit fees and to audit time. Nonetheless, the relationship between the number of the auditor and the CPS is insignificant. This result indicated that the CEO can negatively affect audit fees and audit time of external auditors. The results of the present study suggested that CPS information may have a negative impact on the reliability of accounting information. Conclusion - This study is the first study to examine the reliability of CPS and accounting information for the service industry in terms of human resources in internal accounting control system and audit quality. Therefore, the present study is expected to provide some useful information to economic decision-making of various external parties for service firms.

• The Journal of Small Business Innovation
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• v.19 no.3
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• pp.1-16
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• 2016

Korean government had used public 'credit guarantee schemes' (CGS) as a counter-cyclical measure. However, it is still controversial about the effectiveness of policy financing on the SMEs. Criticism on policy financing involves the argument that supporting enterprises hampers competition and innovation of SMEs by increasing their dependence on the government and delays the exit of marginal firms. In this paper, we investigate how to effectively build up the rationale of running public CGSs. At the same time, we propose the ways to coexist of public credit guarantee and market-based private finance system for SMEs. First, CGS, as a counter-cyclical function, must coexist with the private financial system by compensating the market failure caused by pro-cyclical behavior of the private financial market. Second, CGS has the comparative advantages, compared to both the interest rate policy of the central bank and fiscal policy of the government. The credit guarantee is the symptomatic treatment that could revitalize the economy shortly by providing liquidity. Also, knowing that CGS is provided based on the leverage ratio defined by outstanding guarantee divided by capital fund, public 'credit guarantee' (CG) has an advantage that is free from the risk of government deficit. Third, the reason for existence of the CGS should be founded in supporting services for SMEs, available only in a public sector that is difficult to expect from private banks. In this regard, it is desirable to strengthen the publicness of credit guarantee over the support for start-ups, growing companies, the improvement of productivity, increase of exports, a long-term investment in facilities, the employment-creating businesses, and innovative enterprises.

• Culinary science and hospitality research
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• v.20 no.6
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• pp.175-189
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• 2014

This study was intended to provide fundamental data concerning franchising companies' characteristics and performance in foodservice business by employing financial data from the firms' IDS(Information Disclosure Statements). Multiple regression analysis method was used to identify any correlations among franchising size, marketing competency, operational characteristics, and performance according to technique based upon 169 IDS data as of 2013. In terms of franchisor size and performance, the number of company-operated stores had statistically significant corelation with sales, net income, the total number of stores, and the number of franchisees. With respect to marketing competency and performance, advertising expenses showed statistically significant correlation with sales, the total number of stores, promotion expenses with sales, net income, and the total number of stores. On the other hand, there was no statistically significant correlation with current year's net income. At last, present study found significant correlations among business years, sales, current year's net income, and the total number of stores by regarding operational characteristics and performance, but there was no significant correlation between brands and performance. This study is cross-sectional study which is a limitation to be overcome in further studies. In addition, it is required to review the possibility for franchise management style to contribute to expanding the Korean traditional foods.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.8 no.3
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• pp.1-16
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• 2013

The purpose of study is to promote the development of medium size enterprises(MSE) by analyzing the causal relationship between technology acquisition strategy and firms' performance. In this study, we use the number of intellectual property, sales growth rates, and return on sales as proxy variables of technological and financial performances. This study includes internal R&D investment, cooperative R&D with academy, foreign technologies transferred, and their interaction effects as the independent variables. The results of study are as follows. Frist, R&D Investment, Foreign Technologies Transferred and their interaction effects are positively influence on technological performance. Second, Cooperative R&D with academy and the interaction effects of R&D Investment and Cooperative R&D with academy are negative influence on technological performance. On the other hand, all of the main independent variables and the interaction effects have non-significant relationships with financial performances. These results imply that technological innovation efforts of MSEs do not effectively increase their financial performances. Furthermore, technological supports of government and academy on MSEs' innovation do not effectively increase their innovation outputs. Finally, this study discussed its theoretical and practical implications and the limitations of the study.