• Journal of Navigation and Port Research
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• v.44 no.6
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• pp.541-549
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• 2020

This study conducts differential analysis on the financial positions of Korean shipping companies before and after the bankruptcy of the H carrier, looking specifically at their financial ratios, profit and loss patterns, and other factors related to their financial operation. Firstly, it was discovered that major measures of financial health, such as average assets per carrier, were not affected by the bankruptcy of the H carrier. However, despite this, most carriers experienced large changes in profits and losses, with total sales and shipping revenues averaging 424.5 billion won and 381.7 billion won respectively before the bankruptcy, but falling by half to 252.1 billion won and 234.6 billion won after the bankruptcy. Additionally, charter revenues and expenses also dropped by more than half. EBIT/sales and pre-tax revenue margins were also heavily affected after the bankruptcy, with both figures averaging 8% and 3% respectively before the bankruptcy, but falling into the negative range at -2% and -8% post-bankruptcy, resulting in significant deterioration in operational profitability. The study concludes that there is an urgent need to establish a global sales network, improve cost structures, and consistently secure stable cargo in order to increase Korean carriers' profitability. Of all financial measures, liquidity and total asset efficiency were identified as the most severely-impacted by the H carrier bankruptcy, thereby requiring the most pressing policy addressing.

• Korean Journal of Construction Engineering and Management
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• v.17 no.5
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• pp.13-21
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• 2016

Insolvency of construction companies that play the role of main contractors can lead to clients' losses due to non-fulfillment of construction contracts, and it can have negative effects on the financial soundness of construction companies and suppliers. The construction industry has the cash flow financial characteristic of receiving a project and getting payment based on the progress of the construction. As such, insolvency during project progress can lead to financial losses, which is why the prediction of construction companies is so important. The prediction of insolvency of Korean construction companies are often made through the KMV model from the KMV (Kealhofer McQuown and Vasicek) Company developed in the U.S. during the early 90s, but this model is insufficient in predicting construction companies because it was developed based on credit risk assessment of general companies and banks. In addition, the predictive performance of KMV value's insolvency probability is continuously being questioned due to lack of number of analyzed companies and data. Therefore, in order to resolve such issues, the Bayesian Probabilistic Approach is to be combined with the existing insolvency predictive probability model. This is because if the Prior Probability of Bayesian statistics can be appropriately predicted, reliable Posterior Probability can be predicted through ensured conditionality on the evidence despite the lack of data. Thus, this study is to measure the Expected Default Frequency (EDF) by utilizing the Bayesian Probabilistic Approach with the existing insolvency predictive probability model and predict the accuracy by comparing the result with the EDF of the existing model.

• Journal of Information Technology Services
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• v.15 no.3
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• pp.51-69
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• 2016

Recently, many Korean firms have suffered financial losses and damaged firm's trust due to information security incidents. Hence, a lot of firms have realized the importance of the information security. In particular, the demand for information security certification has increased. This study examined the effect of information security certification using the event study methodology. Our research shows that the announcement of the information security certification significantly influences the market value of the corresponding firm. The certified firms rise, on average, o.4993% (-2 day), 0.5462% (+1 day) of their market value. Further, we found that the financial sector in our data showed a 1.4% higher abnormal returns than the nonfinancial sector. On the other hand, whether a firm first acquired the information security certification is not significant. Our paper presents that it is possible to analyze the effect of the information security certification using the event study. We are expected to be used in making a decision for the investment of information security. Also, our results indicate that the firm which have acquired the information security certification should actively announce that fact.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.3
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• pp.9-18
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• 2019

The purpose of this study is to investigate the relation between conservative loan loss accounting practice of banks, defined as accounting behavior that increases loan loss allowances against expected credit losses, and bank lending. Furthermore, we specify the macroeconomic conditions reflecting debtors' borrowing environments and analyze how these conditions affect the relation between conservative loan loss allowances and bank lending. Although existing literature reports that accounting conservatism has a direct effect on non-financial firms' investment behavior, there is little evidence about an effect of conservatism on banks' lending behavior. By exploiting data showing the links between individual Japanese firms and their individual lenders to control both loan demand and supply, we estimate OLS regressions to test the relationships among conservative loan loss allowance, bank lending, and macroeconomic conditions using a unique dataset containing bank-firm-year observations between 2001 and 2013. We find banks that have conservative loan loss allowances tend to provide fewer loans to firms with financing needs when macroeconomic conditions are good and these conservative banks are likely to provide more loans to firms when macroeconomic conditions are bad. Our findings suggest that reflecting expected credit loss into loan loss allowances can mitigate the procyclical behavior of banks.

• Proceedings of the Technology Innovation Conference
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• 2001.06a
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• pp.117-130
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• 2001

R&D is the core competence of an enterprise. Furthermore, R&D requires huge capital investment and has very risky characteristics. Therefore, to be successful in R&D process, several approaches of engineering economics are used prior to decision-making. Until now, typical approaches of engineering economics such as NPV(net present value) or DCF(Discounted cash flow) have been used. But, they cannot properly capture managerial flexibility to adapt and revise later decisions in response to unexpected market development. In a constantly changing and always uncertain marketplace, managerial operation flexibility and strategic adaptability have become vital in order to successfully capitalize on favorable future investment opportunities and limit losses from adverse market development. For the alternatives of conventional static decision-making approaches, new concept of using real options is introduced. Real option theory is based on financial option's characteristics and checks every revision interval whether situation have changed favorable to decision maker or not. In advantageous situation, the decision maker has only to go on. In contrast, with unfavorable situation, he abandons the investment immediately. In this aspect, real option model is more suitable in very uncertain and dynamic business environment in that it can provide the opportunity to cope with flexibility. This paper suggests efficient and effective R&D investment strategy by using real options model. In addition, this paper compares financial options and real options.

• Proceedings of the Korean Institute of Building Construction Conference
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• 2019.05a
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• pp.125-126
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• 2019

This study aims to recognize damage indicators of typhoon and to develop damage function's indicators, using information derived from the actual loss of typhoon Maemi. As typhoons engender significant financial damage all over the world, governments and insurance companies, local or global, develop hurricane risk assessment models and use it in quantifying, avoiding, mitigating, or transferring the risks. For the reason, it is crucial to understand the importance of the risk assessment model for typhoons, and the importance of reflecting local vulnerabilities for more advanced evaluation. Although much previous research on the economic losses associated with natural disasters has identified the risk indicators that are indispensable, more comprehensive research addressing the relationship between vulnerability and economic loss are still called for. Hence this study utilizes and analyzes the actual loss record of the typhoon Maemi provided by insurance companies to fill such gaps. In this study, natural disaster indicators and basic building information indicators are used in order to generate the vulnerability functions; and the results and indicators suggest a practical approach to create the vulnerability functions for insurance companies and administrative tasks, while reflecting the financial loss and local vulnerability of the actual buildings.

• The Journal of Industrial Distribution & Business
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• v.10 no.4
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• pp.13-24
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• 2019

Purpose - This research explores the impacts of third-party logistics (3PLs) within the aircraft Maintenance, Repair and Overhaul (MRO) industry in the United Arab Emirates (UAE) to explore the role of collaborative relationships for improving outsourcing. Globalization and time based competition have changed business environments and challenged the conventional management strategies that are related to core competencies and operational models. Organizations are forced to devise innovative practices in which logistics outsourcing to 3PLs offers significant advantages. Research design, data, and methodology - This case study was conducted within a leading global aircraft MRO organization whose reach spans across Europe, the Middle East, Asia and the Americas. The methods used face to face semi-structured interviews, validated through further focus group discussions. Results - These findings highlight the effectiveness of collaborative relationships on their role to improve outsourcing and also demonstrated that MROs gain several advantages from 3PL arrangements. However, any gaps in outsourcing management elevates potential risks to organizations as well, which could result in reputational, operational and financial losses. Conclusions - Although generalizability is not possible due to the case study approach, generality suggests that in order to reduce reputational, operational and financial risks, enhanced collaboration with 3PLs is recommended to optimize outsourcing arrangements.

• Journal of Korea Trade
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• v.26 no.8
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• pp.1-20
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• 2022

Purpose - The paper aims to develop the theory of TAM and perceived risk through a more comprehensive and rigorous understanding of the influencing factors of the consumer's adoption of LG HomNet smart home from the perspective of trade-offs. Design/methodology - Based on the TAM and perceived risk theory, combined with the individual characteristics of consumers in the context of information technology as the external factors of the technology acceptance model, this paper constructs a theoretical model of the factors affecting the use intention of the consumer. It was empirically tested by using SEM, and survey data was collected from 458 respondents. Findings - The research results show that 9 hypotheses of the research model are supported and have reliable prediction accuracy. Consumers' perceived interest, perceived connectivity and perceived controllability have a significant positive impact on their intention to use. In addition, this paper also confirmed the mediating effect of perceived usefulness and perceived ease of use. Originality/value - Consumers are very concerned about gains and losses. Low-level performance risks, security risks, and financial risks will drive the consumer to have a stronger intention to use, and financial risks have the strongest impact. This research provides a useful implication and guidance for smart home equipment manufacturers and service providers in product and service innovation and marketing and promotion strategies.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.38 no.3
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• pp.39-48
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• 2015

In this study, granting the optimal loan limit on SME (Small and Medium Enterprise) loans of financial institutions was proposed using the traditional newsvendor model. This study was the first domestic case study that applied the newsvendor model that was mainly used to calculate the optimum order quantity under some uncertain demands to the calculation of the loan limit (debt ceiling) of institutions. The method presented in this study made it possible to calculate the loan limit (debt ceiling) to maximize the revenue of a financial institution using probability functions, applied the newsvendor model setting the order volume of merchandise goods as the loan product order volume of the financial institution, and proposed, through the analysis of empirical data, the availability of additional loan to the borrower and the reduction of the debt ceiling and a management method for the recovery of the borrower who could not generate profit. In addition, the profit based loan money management model presented in this study also demonstrated that it also contributed to some extent to the prediction of the bankruptcy of the borrowing SME (Small and Medium Enterprise), as well as the calculation of the loan limit based on profit, by deriving the result values that the borrowing SME (Small and Medium Enterprise) actually went through bankruptcy at later times once the model had generated a signal of loan recovery for them during the validation of empirical data. accordingly, The method presented in this study suggested a methodology to generated a signal of loan recovery to reduce the losses by the bankruptcy.

• Journal of Information Technology Services
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• v.19 no.6
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• pp.145-159
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• 2020

Because of the recent development of information and communication technology, companies are exposed to various media such as blogs, social media, and YouTube. In particular, exposed news affects the company's reputation. So, while positive news can improve corporate value, negative news can lead to financial losses for the company. In this study, we redefine corporate reputation as social responsibility, vision and leadership, financial performance, products and services through existing literature, and conducted an AHP survey with a total of four components to calculate the weight of each factor. As a result of the calculation, the proportion of financial performance was the highest at 0.41, and products and services, vision and leadership, and social responsibility were the lowest. In addition, in order to measure the reputation of a company, it is classified as a component that defines online news using the LDA technique. In addition, through sentiment analysis, an index for each corporate reputation factor was derived, and the reputation index was calculated by combining it with the AHP analysis result, and Spearman ranking correlation analysis was performed to secure the validity of the research results. Therefore, the significance of this study is that the definition and importance of the constituent factors can contribute to the future planning and development direction of the company, and also contribute to the derivation of the corporate reputation index. This study is significant in that a new analysis methodology that applied AHP analysis results to sentiment analysis was suggested.