• The Journal of the Convergence on Culture Technology
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• v.9 no.2
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• pp.319-325
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• 2023

This study investigates the impact of over-investment on the market value of cash holdings. In addition, this paper examines whether the effect of over-investment on the value of cash holdings differs depending on firms' ownership structure. The results show that increase in over-investment reduces the market value of cash holdings. This suggests that investors perceive that over-investment deteriorates future business performance and generates excessive burdens on future cash flows. As a result, they provide negative evaluation on the market value of cash holdings. In addition, the negative impact of over-investment on the market value of cash holdings is more significant for owner manager firms where managers hold a high level of equity. Such empirical results imply that owner manager firms are more likely to use their cash holdings for private interest, therefore, over-investment reduces the cash value to a greater extent. This study provides empirical evidence that the effect of over-investment on the market value of cash holdings varies depending on the characteristics of firms' ownership structure.

• Asia-Pacific Journal of Business
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• v.12 no.4
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• pp.63-86
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• 2021

Purpose - The purpose of this study is to explore the impact of the application of accounting conservatism on the investment efficiency of listed companies in China under the background of the current rising environmental uncertainty. Design/methodology/approach - This study collected 14,934 observations of A-share listed companies in Shanghai and Shenzhen from 2013 to 2020, and analyzed the data by means of moderating effect test and multiple regression analysis. Findings - The results show that environmental uncertainty deteriorates the company's investment efficiency. The higher the level of environmental uncertainty, the more prone to over-investment and under-investment. Accounting conservatism plays moderating role between environmental uncertainty and investment efficiency. Among them, the moderating effect of conditional conservatism is to alleviate under-investment of the company under high financing constraints and the over-investment, while it intensifies the under-investment under low financing constraints. The moderating effect of unconditional conservatism is to alleviate the under-investment. Research implications or Originality - This study finds out the internal mechanism of accounting conservatism affecting investment efficiency, which not only helps to understand about the value of accounting conservatism standards, but also helps to improve the investment efficiency of listed companies.

• Journal of Family Resource Management and Policy Review
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• v.8 no.1
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• pp.29-45
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• 2004

This study compared household's investment behaviors over consumer's ages before and after the economic crisis using 1995 and 2000 National Survey of Family Income and Expenditure in korea. Household's investment behaviors were compared in terms of household's financial statements, amounts and proportions invested in various assets, and rate of return on investments. The proportion invested in securities of all households. In terms of the proportion invested, consumers under 40s increased the proportion invested in insurance while consumers over 50s increased the proportion invested in savings and trusts in 1995 than in 2000. Consumers of all ages increased the proportion invested in securities in 2000 than in 1995. Young households had higher rate of return in 1995 while old households had higher rate of return in 2000.

• Journal of Digital Convergence
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• v.6 no.2
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• pp.97-105
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• 2008

This paper tries to measure the spill-over effect of the production and investment of telecommunication service industry (hereafter telecommunication industry), using the most recent data of 2003 input-output tables. The results are summarized as follows. First, the industries which have the biggest spill-over effect from the production of telecommunication industry is miscellaneous business service (including the sale commission of telecommunication service), other engineering services (including royalty), and business consumption. Second, the production of telecommunication industry induces more value-added, and less production, less import, and less employment than related industries such as radio and television equipment, communications and broadcasting equipment, and computer and peripheral equipment. Third, while the investment of telecommunication service amounts to 15% of its production, the effect of the investment on production, value-added, consumption, and employment reaches 70% of that of its production. The policy implication of this paper is that the telecommunication industry contributes to overall economy mainly through its investment.

• Industrial Engineering and Management Systems
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• v.9 no.2
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• pp.121-130
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• 2010

In today's uncertain economic environment, economic risk is inherent in making large investments on manufacturing facilities. It is, therefore, practically meaningful to divide investment over multiple periods, reducing the risk of investment. Then, the cash-flow over the entire planning horizon would comprise positive inflow and negative outflow. In this case, in general, evaluation by internal rate of return (IRR) is not feasible, because multiple IRRs are involved. This paper deals with a problem of evaluating profitability, as well as risk, of investment alternatives made in multiple times of investment over the entire horizon. Typically, an additional investment is required after the initial one, for expanding manufacturing capacity or other reasons. The paper pays attention to a unit cash-flow over two periods, decomposing the total cash-flow into a series of unit cash-flow patterns. It is easy to evaluate profitability of a unit cash-flow by using IRR. The total cash-flow can be decomposed into the series of two types of unit cash-flows: an investment type one (negative-positive) and the borrowing type one (positive-negative). This paper, therefore, proposes a method in which only the borrowing type unit cash-flow is eliminated in the series by converting total cash-flow using capital interest rate. Then, a unique IRR can be obtained and the profitability is evaluated. Thus, the paper extends the method of IRR so that it may help decision making in complicated cash-flow pattern observed in practice.

• Asia pacific journal of information systems
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• v.16 no.2
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• pp.111-122
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• 2006

This paper investigated the causal relationship between IT investment and economic performance with the office, computing and accounting machinery (OCAM) and gross domestic product (GDP) statistics from the United States for the period 1961 to 2001. Due to non-stationary aspects of the series, found by unit root tests, it was deemed applicable to apply growth models using the first difference of the series. The results indicate that IT investment growth at the country level do not only cause economic performance growth, but are also caused by economic performance growth. While IT investment growth affect economic performance growth over shorter time periods, economic performance growth affect IT investment growth over longer time periods. As a result, this study reveals IT investment growth have the preceding effect on economic performance growth, and then economic performance growth impact subsequently on IT investment growth.

• Korean System Dynamics Review
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• v.12 no.1
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• pp.5-37
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• 2011

This article aims to clarify what is the best investment behavior in Capital Intensive Industries(hereinafter CIIs) which show repeated business cycles. In CIIs, investments is centered in the period of upturns and goes beyond the adequate level because of the time that takes to completion of facilities. This over-investment causes oversupply and downturn, and in period of downturn, investments shrinks under the adequate level. The repeated change of over-investment and under-investment is the reason for the business cycles. In this article, a simulation model replicating the business cycles in CIIs was constructed and the effects of various investment strategies was tested. The results are as follows. First, the investment behavior following market condition causes the ongoing fluctuation of profits. Second, strategic increase in flexibility such as adjustment of facility utilization and shortening of facility construction time contributes to the increase in profit and stabilization of income. Third, in relation to market condition, the constant investment is more profitable in stagnated market and the counter-market investment is more profitable in growing market. In sum, it is desirable not to synchronize their investment with those of competitors.

• Journal of Digital Convergence
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• v.12 no.3
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• pp.177-187
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• 2014

We investigate the association between tax strategy and investment efficiency focusing on manager's investment decision. Specifically, we examine the effect of manager's tax avoidance on the firm's investment level. The result show that as the degree of tax avoidance becomes higher firm's over investment increases. This result implies that the available resources generated from firm's tax avoidance induces over investment. Prior researches have been interested in the effects of firm's tax strategy on firm value. However, there is little literatures regarding the effects of firm's tax strategy on management's real investment decisions which provides the important implications about the mechanisms between tax strategy and firm value. In this respect, our research provides a meaningful results which demonstrates the effects of firm's tax strategy on manager's real investment decisions. This will provide useful implications for the investors and government regarding manager's tax avoidance behavior.

• Journal of Korea Trade
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• v.27 no.1
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• pp.60-78
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• 2023

Purpose - The study analyzed 90 online firms worldwise and observed them for ten years to investigate their investments and firm performance variabilities. This study attemped to verify the existence of agency problems in online firms. Through this, the paper intends to expand the scope of research in the fields of investment and firm value both empirically and in theory. This study also attempted to supplement the insufficient logic of previous studies by analyzing the relationship between investment and profitability. Design/methodology - In this study, the investment is subdivided into over-, under-, and neutral investments, and an empirical analysis of the firm performance was conducted. As investment generally has long-term effects, the impact of a firm's investment on future firm performance and variabilities in firm performance was considered over the short-and medium-term period. Findings - It was found that there was a negative relationship between firms with an overinvestment and future firm performance. Underinvestment has no clear statistically significant results on firm performance. This implies that overinvestment causes more reduction in future firm performance than underinvestment. It was also found that underinvestment and overinvestment significantly increased the variability of firm performance. A positive significance was found between under- and over- investment with a variability of 3 years and overinvestment with a variability of 4 years in the future. A negative relationship was found between neutral investment propensity and future performance variabilities. Neutral investment has less effect on the future performance variability of a firm than a firm's overinvestment and underinvestment. For online firms, underinvestment and overinvestment have a greater effect on the firm's future performance variability than neutral investment. Originality/value - The agency theory predicts that information asymmetry and adverse selection problems exacerbate conflicts of interest among stakeholders, thus firm performance. The study contributed to accumulating research on online firms that are currently underexplored by analyzing the investment behavior of major firms in the online industry.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.27
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• pp.183-213
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• 2005

This study is achieving overseas investment to be kept and manages important position in business scope because Korean Company achieves business in major market in world and goes forward. under proposition that development(foreign direct investment) previous engagement can not but differ with advanced nation enterprise's model in over sea direct investment achievement. Grasp ramification(pattern change substance) of overseas direct investment since the 1990 to korean manufacture Firm(enterprise). Seek political consultation by analyzing change of factor and investment decision factor by year in dimension by industry investment winter season by year affecting in oversea direct investment and was attained in purpose to verify existent theory's explanation power connected with investment previous engagement. This is that can develop and procure competitive advantage of enterprise peculiarity by making overseas direct investment adversely with existent theory that can make foreign country direct investment though there is high position of enterprise characteristic's competitive advantage and move of knowledge and information is important in korean firm's overseas direct investment in globalization roadbed in at least own field through change and renovation establish experiment model under proposition that should grope more active previous engagement than advanced nation enterprise and arranged subject of study if it is korean's firm that wish to become universal guidance enterprise. and examine trend of direct investment and actual conditions invested first in the foreign countries as examples by investment department, by investment industry inside of investment scale etc..., establish korean firm's invest area selection and decision and investment very important person and effect analysis Circumstance-model that is based in strategic adaptedness by year. Circumstance-variable have influenced how in overseas direct investment and decision and what variable will be considered first in over sea direct investment did Empirical analysis in here after