• Knowledge Management Research
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• v.17 no.3
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• pp.161-179
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• 2016

The recent patent wars in the information technology (IT) industry demonstrate the strategic importance of IT patents in the industry. In this paper, we adopt the lens of real options to study the value of IT patents for IT firms. Specifically, we examine the relationship between IT patents and firms' market performance. We also consider the moderating effect of the innovation orientation of firms' patent portfolios (exploitative vs. explorative). Based on a large panel dataset consisting of 697 firms in US IT industries, our results suggest that the impact of IT patents on firm value (as measured by Tobin's q) is positive and significant. Further, we find that this impact varies, depending on the innovation orientation of firms' patent portfolios. IT patent portfolios with higher levels of an exploitative orientation are associated with higher firm value, compared to those with a lower exploitative orientation. This study highlights the value of employing real options theory as the underlying mechanism in understanding the impact of patents on firm valuation. Future researchers can adopt the real options lens to identify and empirically examine the role of other factors that may affect the value of patents and other investments exhibiting real option characteristics. While our paper answers some questions about the value of patents in the IT industry, it also raises a number of additional new questions. As such, we hope that it will generate more research on this important topic.

• Journal of Technology Innovation
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• v.14 no.1
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• pp.67-99
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• 2006

Utilizing the patent application data between 1997 and 2002, this study focuses on analysing the impact of patents on firm value. Especially we attempt to examine the difference of patents between venture firms and general firms. This paper first shows that the number of the patent applications of general firms listed on the securities market is more than that of venture firms listed on KOSDAQ. It is thought that this result is originated from the facts that the size of firms of the securities market is usually bigger than that of the firms of KOSDAQ and that these large firms could manage R&D more efficiently. Second, this paper reports that there is no difference in the ratio of patent maintenance between venture firms and general firms. Both venture firms and non-venture firms would do their best to keep their patents after patent regisration. Third, in the regression of patent index and firm growth, we find that the excellence of patent and the number of patents per employee would have an impact on the growth of firms. Fourth, the regression of patent index and profitability shows that the excellence and the number of patents per employee might have an effect on the profitability of firms.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.2
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• pp.247-255
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• 2019

This study examines the different roles of cash flow in assessing investment returns in the Association of Southeast Asian Nations (ASEAN). The analysis covers over 900 listed firms across Malaysia, Indonesia, Philippines, Singapore and Thailand for the period post the Asian financial crisis of 2001-2017. Firm-level panel data analysis shows that cash flow factors are important in all contexts of cash return on assets, earnings quality and market value multiple across the region even after controlling for typical measures of profitability. The results suggest that firms should manage cash flow prudently in considerations of firm value from the shareholder's perspective, measured directly using stock return. Cash profitability on assets should become an important firm performance indicator, whilst higher cash component over reported earnings is preferred. The market also tends to respond favourably to cash flow yield as a price multiple in valuation, outpacing the role of earnings yield. Such findings are robust across the pre and post subprime crisis periods, across estimation methods pertaining to finance panel standard errors, as well as across static and dynamic considerations of returns. It is hence sensible to consider cash flow factors in the research pertaining to asset pricing and factor investing in the ASEAN region.

• Journal of Intelligence and Information Systems
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• v.25 no.2
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• pp.99-122
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• 2019

According to the recent IDC (International Data Corporation) report, as from 2025, the total volume of data is estimated to reach ten times higher than that of 2016, corresponding to 163 zettabytes. then the main body of generating information is moving more toward corporations than consumers. So-called "the wave of Big-data" is arriving, and the following aftermath affects entire industries and firms, respectively and collectively. Therefore, effective management of vast amounts of data is more important than ever in terms of the firm. However, there have been no previous studies that measure the effects of big data investment, even though there are number of previous studies that quantitatively the effects of IT investment. Therefore, we quantitatively analyze the Big-data investment effects, which assists firm's investment decision making. This study applied the Event Study Methodology, which is based on the efficient market hypothesis as the theoretical basis, to measure the effect of the big data investment of firms on the response of market investors. In addition, five sub-variables were set to analyze this effect in more depth: the contents are firm size classification, industry classification (finance and ICT), investment completion classification, and vendor existence classification. To measure the impact of Big data investment announcements, Data from 91 announcements from 2010 to 2017 were used as data, and the effect of investment was more empirically observed by observing changes in corporate value immediately after the disclosure. This study collected data on Big Data Investment related to Naver 's' News' category, the largest portal site in Korea. In addition, when selecting the target companies, we extracted the disclosures of listed companies in the KOSPI and KOSDAQ market. During the collection process, the search keywords were searched through the keywords 'Big data construction', 'Big data introduction', 'Big data investment', 'Big data order', and 'Big data development'. The results of the empirically proved analysis are as follows. First, we found that the market value of 91 publicly listed firms, who announced Big-data investment, increased by 0.92%. In particular, we can see that the market value of finance firms, non-ICT firms, small-cap firms are significantly increased. This result can be interpreted as the market investors perceive positively the big data investment of the enterprise, allowing market investors to better understand the company's big data investment. Second, statistical demonstration that the market value of financial firms and non - ICT firms increases after Big data investment announcement is proved statistically. Third, this study measured the effect of big data investment by dividing by company size and classified it into the top 30% and the bottom 30% of company size standard (market capitalization) without measuring the median value. To maximize the difference. The analysis showed that the investment effect of small sample companies was greater, and the difference between the two groups was also clear. Fourth, one of the most significant features of this study is that the Big Data Investment announcements are classified and structured according to vendor status. We have shown that the investment effect of a group with vendor involvement (with or without a vendor) is very large, indicating that market investors are very positive about the involvement of big data specialist vendors. Lastly but not least, it is also interesting that market investors are evaluating investment more positively at the time of the Big data Investment announcement, which is scheduled to be built rather than completed. Applying this to the industry, it would be effective for a company to make a disclosure when it decided to invest in big data in terms of increasing the market value. Our study has an academic implication, as prior research looked for the impact of Big-data investment has been nonexistent. This study also has a practical implication in that it can be a practical reference material for business decision makers considering big data investment.

• The Journal of Industrial Distribution & Business
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• v.10 no.11
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• pp.49-56
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• 2019

Purpose: Corporate social responsibility is a self-regulating business model that helps a firm be socially accountable to the public. By practicing corporate social responsibility, firms can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. Corporate social responsibility activities are not directly linked to increasing corporate performance and corporate value, but rather involve spending expenses. Based on these facts, this study verifies whether the effects of corporate social responsibility activities differ depending on the firm's situation. Research design, data and methodology: This study analyzed the effect of market competition on corporate social responsibility activities using logistic regression analysis on listed companies in the KOSPI and KOSDAQ for fiscal years 2014 through 2016. In this study, market competition was measured using the Herfindahl-Herschman Index(HHI). Higher HHI value can be interpreted as a lower degree of market competition. We also measured corporate social responsibility activities using the KEJI Index published by the Korea Economic Justice Institute (KEJI). If a firm-year is included in the top 200 companies of the KEJI Index, it is classified as a good corporate social responsibility activity firm. Results: We find that companies in less competitive market were not included in the KEJI Index. This result indicates that firms in the market with lower market competition perform less corporate social responsibility activities that incur costs. An additional analysis showed that there was a significant negative relationship between the market competition and the corporate social responsibility activity scores published by the KEJI Index. These result adds robustness to the result of the hypothesis that firms that have a monopolistic place in the market practice passive corporate social responsibility activities. Conclusions: The results show that managers of a firm in the lower market competition have a lower incentive to use limited resources for projects that are not directly related to revenue. The results of this study imply that corporate social responsibility activities vary according to the position of the business. Therefore, this study suggests that market investors should consider the degree of competition in the market when they evaluate corporate social responsibility activities.

• Journal of Information Technology Services
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• v.11 no.3
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• pp.39-48
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• 2012

It is essential that firm makes a rational and scientific decision making and creates a news value for the future direction. To do so, many firms attempt to collect meaningful data and find the filtered and refined implication for the better customer relationship and the active market drive through the various analytic tools. Among the possible IT solutions, utilization of 'Big Data' is becoming more attractive and necessary in such a way that it would help firms obtain the systemized and demanding information and facilitate their decision making process to keep up with the market needs. In this paper, it introduces the concepts and development of 'Big Data' recognized as a IT resource and solution under the rapidly changing firm environment. This study also presents the several firm cases using Big Data' and the Oracle's total data management and analytic solutions in order to support the application of 'Big Data'. Finally this paper provides a holistic viewpoint and realistic approach on use of 'Big Data' to create a new value.

• The Journal of Industrial Distribution & Business
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• v.8 no.5
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• pp.87-93
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• 2017

Purpose - This paper investigates whether managerial overconfidence is associated with firm-specific crash risk. Overconfidence leads managers to overestimate the returns of their investment projects, and misperceive negative net present value projects as value creating. They even use voluntary disclosures to convey their optimistic beliefs about the firms' long-term prospects to the stock market. Thus, the overconfidence bias can lead to managerial bad news hoarding behavior. When bad news accumulates and crosses some tipping point, it will come out all at once, resulting in a stock price crash. Research design, data and methodology - 7,385 firm-years used for the main analysis are from the KIS Value database between 2006 and 2013. This database covers KOSPI-listed and KOSDAQ-listed firms in Korea. The proxy for overconfidence is based on excess investment in assets. A residual from the regression of total asset growth on sales growth run by industry-year is used as an independent variable. If a firm has at least one crash week during a year, it is referred to as a high crash risk firm. The dependant variable is a dummy variable that equals 1 if a firm is a high crash risk firm, and zero otherwise. After explaining the relationship between managerial overconfidence and crash risk, the total sample was divided into two sub-samples; chaebol firms and non-chaebol firms. The relation between how I overconfidence and crash risk varies with business group affiliation was investigated. Results - The results showed that managerial overconfidence is positively related to crash risk. Specifically, the coefficient of OVERC is significantly positive, supporting the prediction. The results are strong and robust in non-chaebol firms. Conclusions - The results show that firms with overconfident managers are likely to experience stock price crashes. This study is related to past literature that examines the impact of managerial overconfidence on the stock market. This study contributes to the literature by examining whether overconfidence can explain a firm's future crashes.

• Journal of Industrial Convergence
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• v.19 no.5
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• pp.13-19
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• 2021

In this study, the relationship between R&D investment and firm value was approached from ESG's G(governance) perspective to verify the moderating effect of the corporate governance and ownership structure. To this end, a panel analysis was conducted on a total of 2,825 samples of 405 manufacturing companies listed on the KOSPI market during 2013~2020. The main analysis results are as follows. First of all, we found that R&D investment has a negative impact on firm value, at least in the short term, and that these relationships are moderated by corporate governance and ownership structure. When professional CEO with high level of expertise in business and management does lead R&D investment, the negative impact of R&D investment on firm value is mitigated compared to owner-manager. Also, the stronger the power of outside blockholders, the more transparent the management and disclosure of information, alleviating the information asymmetry between internal and external shareholders, which mitigates the negative impact of R&D investment on firm value. The findings suggest that the factors of ESG may not only have a direct impact on firm value, but also have a moderating effect on firm value.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.13 no.3
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• pp.141-152
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• 2018

Although market orientation as the implementation of the marketing concept has long been a major subject in marketing, firms with market orientation do not necessarily come with high performance, showing mixed results in literature. There have been attempts to link market orientation-firm performance until recently with different mediators, but the appreciation on market orientation has been faded in practice. This study focuses on two possibilities for the causes of these problems. 1) Previous studies have overlooked the qualitative aspects of market orientation, 2) have focused on the performance at corporate level. To provide a generalized performance-generation framework, this study demonstrates the market information quality as a moderating variable and introduces the task performance of employees as a universal mediator between market orientation and the firm performance. As the result of this study, we confirmed the positive role of the market information quality and employees' task performance in market orientation-Firm Performance. The relationship between market orientation and employee's task performance becomes stronger when market information quality is high in value. We highlighted the performance generating mechanism of market orientation, regardless of context. This research provides new insights for marketing scholars and managers with regard to both activities and quality of market information and how market orientation affects individual and firm level performance.

• Korean small business review
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• v.41 no.1
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• pp.75-96
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• 2019

This study used age, education, major, working period as CEO's characteristics and examine relationship between these characteristics and R&D Investment. Furthermore this study examined how CEO should react in terms of R&D investment, which is effected by CEO's characteristic in the market. The empirical results are following. (1) When CEO's age are young, they spend much money for R&D investment. And R&D investment which is determined by young CEO has a positive effect on relation of firm value. (2) A higher educational background has a positive effect on R&D investment and will create higher firm value. (3) When CEO's major is competitive in the same industry, it has a positive relationship with R&D investment and its firm value is bigger than though. (4) When CEO working period is long, they showed active to R&D investment. On the other hand, the firm value decreased. This study focused on analyzing the relationship between characteristics of CEO and R&D Investment, furthermore, how R&D investment which effected by CEO's characteristic is contributing in creating the firm value. This results indicate that CEO's characteristics reflect R&D investment and value of venture business. Therefore, CEO's characteristics should be considered financial information and firm value in the market.