• The Journal of Small Business Innovation
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• v.20 no.1
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• pp.1-18
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• 2017

This study examined whether divided and spun-off companies design and execute spin-offs to minimize tax burdens by analyzing multiple spin-off transactions in the Dongbu Group, when the Korean tax law regarding corporate restructuring was amended in July 2010. Before the July 2010 tax amendment, taxes on the capital gains arising from the qualifying spin-off were deferred to the earlier of the shares in or assets acquired by the spun-off company are disposed. This tax treatment relieves the divided company's tax burden by deferring taxes on capital gains, compared with non-qualifying spin-offs. However, if shares in or assets acquired by the spun-off company are disposed after the July 2010 tax amendment, the capital gain incurred at the time of the qualifying spin-off would be taxed again at the spun-off company, in addition to a taxation on the divided company's capital gains. This creates double taxation implications for the parties involved in the spin-off. As a result, the double taxation may outweigh the benefit from the tax deferral on the qualifying spin-off, which may make a qualifying spin-off tax unfavorable. Among the four spin-off cases in the Dongbu Group addressed in this study, a spin-off occurred before the tax amendment, whereas three spin-offs occurred after the tax amendment. Initially, we expected that the spin-off before the tax amendment would be a qualifying spin-off, and the other three spin-offs would be non-qualifying spin-offs, considering the taxation rules before and after the July 2010 tax amendment. However, based on the review of summarized balance sheets disclosed in the spin-offs' corporate filings, no capital gains arose during the four spin-offs that occurred in the Dongbu Group. Therefore, we concluded that the Dongbu Group considered non-tax factors more than tax factors while designing and executing the spin-offs. The local media posited during this period that these spin-offs may intend to resolve financial issues in the Dongbu Group, and this analysis was supported by the fact that some shares in the new spun-off companies were sold by the Dongbu Group. Our case studies provide evidence that all costs, including both tax and non-tax costs, must be considered in the course of spin-offs, in addition to the tax burdens on all parties involved in the corporate restructuring, which parallels the work of Scholes et al. (2008). This study provides implications that various aspects should be considered and reviewed in advance when the management makes decisions for effective tax planning.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.17 no.9
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• pp.74-82
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• 2016

The term research institute spin-offs refers to new firms created by public research institutes. These spin-offs are different from other start-ups in two respects: on the one hand, they should be located in the Special Research and Development Zones and, on the other hand, these firms are supposed to commercialize the results of public R&D activities. These spin-off firms show higher rates of survival and job creation than general new firms, which means that their contribution to economic growth is not negligible. The present study analyzes the factors affecting research institute spin-offs using a random effect panel logit model and negative binomial model. From previous studies, four elements are identified as playing an important role in the commercialization of public R&D through spin-offs, namely their organizational character, research capability, technological character, and geographical location. The empirical results demonstrate that government research institutes with more researchers and patents are more likely to create new firms. In addition, the location of the institutes significantly affects the probability of their creating spin-offs and their number. When the technological stage and TLO size are considered, however, it turns out that the number of researchers and technological stage play important roles in the spin-offs.

• International Journal of Advanced Culture Technology
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• v.5 no.3
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• pp.1-10
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• 2017

In this paper, we examine the points of similarity and difference between Korea, Japan, and the USA in terms of the spin-off effects of space technology on cultural life. In Japan and the USA, spin-off effects of space development research by government funded research centers are diffusive while in Korea they are interruptive. Spin-offs of research results impact cultural life via technology transfer and commercialization in businesses. This is because the Korean aerospace industry has progressed largely based on an overall system, but the promotion of internal parts and sub-systems, which can trigger technological development and spin-off effects in manufacturing, has been neglected. In the case of the KARI, the government funded research center, we argue that it is necessary for KARI to devote more resources to transfer (or promote spin-offs of) space technology to small and medium-sized businesses and other industries.

• Journal of Korea Technology Innovation Society
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• v.21 no.2
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• pp.560-586
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• 2018

This study empirically analyzes how factors inside university influence the creation of technology-based spin-offs, employing unique data sets. We posit a two-year time lag between the explanatory variables and the dependent one using total 270 university data sets for 5 years in Korea. The results show that universities with experienced technology licensing offices (TLO), those with R&D personnel size, those in possession of incubation policies or business incubators have an edge in creating technology-based spin-offs. The findings provide policy implications. By making more informed decisions on fostering technology-based spin-offs at universities, policymakers can promote the creation of new industries and lead them to create jobs in line with the national economic growth policy.

• Asia pacific journal of information systems
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• v.12 no.3
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• pp.213-233
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• 2002

Recently, a lot of companies intend to make spin-offs as the Internet usage is proliferating in the business area. A spin-off means a small but autonomous company which is thought to show higher profitability rather than it stays under the influence of a mother enterprise. To prove our hypotheses, we collected questionnaire data from 104 companies considering spin-offs. From experiments with Factor Analysis, we found that there exist four factors which decision-makers should consider before deciding spin-offs such as competence of unit, competence of mother company, competence of spin-off company, and support of mother company. After massive experiments with Regression Analysis we also found that there are significant three performance factors such as competence of unit, competence of spin-off company, and support of mother company. The survey also asked about three potential strategies that they may have been following for achieving business objectives: Cost leadership, Focus, and Differentiation, Six benefits factors emerged from this study: External competitiveness, Internal competency, Productivity, Change, Cost saving, and Improvement. External competitiveness was the most important benefit, and it predicted a Differentiation and Focus strategy. Productivity and Improvement also predicted a Differentiation strategy. External competitiveness, Change, and Cost saving predicted a Cost leadership strategy. However, organizations followed Differentiation and Focus strategies significantly more than Cost leadership. The assessment thus sheds light on the link between information strategy and spin off. We hope that based on our results, many companies considering a spin-off can make a right decision and expect higher performance in a turbulent business environment.

• Journal of Korea Technology Innovation Society
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• v.2 no.1
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• pp.58-73
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• 1999

The venture firms originating from the government-financed research institutes of Taeduk Science Town play a dominant role in Taejon. Those venture fm have the following characteristics. First, they are innovative in the growth stage, although not so innovative in the beginning stage. Second, they still largely depend on the domestic market because of their import-substitution strategy. Third, they mostly lack administrative capabilities. Finally, the infrastructure of venture firms is not good in spite of many supporting government policies. The efficient management of the existing business incubators, the establishment of special venture capital, and continuous supports by the incubating organizations should be warranted to encourage the spin-offs from the government- financed research institutes.

• Journal of Digital Convergence
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• v.7 no.1
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• pp.157-164
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• 2009

This research focuses on entrepreneurial orientation(EO) of technology spin-offs as they are expected to reduce the gap between their technology and the market. Entrepreneurial orientation is an organizational activity or process that redistributes or combines resources in an innovative way and takes risk to create new values. It helps improve the level of organizational innovation to deal with uncertainty. An empirical study was performed to analyze the EO of spin-offs established by members of university faculties and research institutes in Korea. Antecedent variables to EO are hypothesized to include public policy for university faculty members and researchers at research institutes, the relationship with incubating organizations, and the level of social networking with other firms. The EO and technological performance relationships are also hypothesized. Data from a total of 121 spin-off organizations were collected and a series of multiple regressions were performed. The performance variable included both technological performance, such as the number of newly marketed products and new technology and subjective performance, such as the level of satisfaction with sales amount and profitability. Several important conclusions were drawn from this study. First, while government policy is not related to EO, the policy of a university or a research institute has a significant effect on the level of innovativeness. Second, a high percentage of human resources applied at the incubating organization results in a negative effect on risk taking. The level of cooperation with the incubating organization too is not related to Entrepreneurial Orientation. Third, the intensity of cooperative networking with other firms has a significant effect on risk-taking. Network relationship with government related organizations is not related to Entrepreneurial Orientation. This study analyzes the importance and role of policy of the university and research institute and networking with other firms to improve EO. It also suggests that a high composition of human resources at the incubating organization has a negative relationship with EO.

• Journal of Korea Technology Innovation Society
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• v.1 no.2
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• pp.208-219
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• 1998

In the light of the strategic utilization of the national R & D projects, this paper is to induce the spin-off strategies to improve the national R & D effectiveness through analyzing the spin-off characteristics of nuclear technologies, the spin-off status of the advanced countries and the case study of Korean nuclear spin-offs. Spin-off process is viewed as a three-stage operation, such as preparation stage, implementation stage and maintenance stage. In order to find the correlation between the influencing factors and spin-off effectiveness, the Spearman's correlation coefficient was employed as a specific statistical technique. By integrating this correlation, spin-off process and spin-off strategies, this paper presents an efficient framework to improve the spin-off effectiveness.

• Journal of Technology Innovation
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• v.14 no.2
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• pp.167-181
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• 2006

This paper reviews regional innovation policy in Japan. 'Technopolis' policy, the first technology-based regional development policy in the world, was implemented in Japan. Nonetheless, technology-based regional endogenous development did not occur. Then, regional technology transfer was pursued. In order to make use of universities and public research institutes in a region for development, university-industry collaboration and cross-over, such as university spin-offs, were promoted. Within this background, new technology-based regional development policies have been introduced based on a cluster approach. These policies are the knowledge cluster Initiative and the industrial cluster program. However, existing companies have difficulty in carrying out innovation. This paper argues that a cluster to create new start-ups that carry out innovation is also needed and explains a new concept of venturing cluster. Based on this new cluster concept, this paper analyzes the situation of Sapporo in Japan, where many university spin-offs are being created in the biotechnology field.

• 한국벤처창업학회:학술대회논문집
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• 2022.04a
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• pp.157-161
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• 2022

Building on the DC interaction model between a parent company and its spin-offs, we examine that a dyadic relationship can be differentiated within the functions of space, motivation, and time. We investigate that these three factors encompassing the parent-spin-off DC relationship can be applicable to both linear(i.e., geographic proximity and low spin-off CEO's salary is positive) and nonlinear(i.e., too much frequency of new spin-off creation is as harmful as too little) effects on determining the performance of spin-off firms. The direction of causality is underpinned by social capital, human capital, and compensation-activation theory rather than by the normal consequences of previous empirical research. Further, our results suggest the overlap between DC and entrepreneurship; namely, spin-off firms create, learn, and exploit opportunities through a reconfiguration of parent DC so that DC establishes itself as a key concept in the entrepreneurship domain.