• Journal of the Korea Academia-Industrial cooperation Society
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• v.14 no.2
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• pp.674-680
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• 2013

This paper investigates the impact of liquidity constraints on investment expenditures of family and non-family firms. We analyze the ownership structure of family firms to determine whether family control alleviates or exacerbates investment-cash flow sensitivity in domestic firms. To examine the impact of liquidity constraints on investment expenditures of family and non-family firms, we used a financial data of 644 Korea Exchange traded companies over the 2000 - 2010 period. We estimated a time-series and cross-sectional regression model, using samples of family firms and non-family firms. The results show that cash flow is not associated with investment expenditure in family firms, whereas cash flow has a positive impact on investment in non-family firms. Our results show that lower or no investment-cash flow sensitivities in family-controlled firms are mainly attributable to lower agency costs through strong monitoring activities of family members. Higher investment-cash flow sensitivities are observed in non-family firms with more agency problems. This suggests that investment-cash flow sensitivities would be useful measures of liquidity constraints.

• Journal of Industrial Convergence
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• v.22 no.9
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• pp.17-30
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• 2024

This study focuses on the effect of strategic deviance and managerial ability on cash flow from operating activities, which is financial performance. In addition, this paper examines the effect of managerial ability on the relationship between strategic deviance and cash flow from operating activities. The sample was extracted and analyzed for non-financial businesses among listed corporations with settlement of accounts in December from 2011 to 2020. As a result of the analysis, it was confirmed that strategic deviance found a significant negative effect on the cash flow from the operating activity, and managerial ability found a significant positive effect on the cash flow from the next operating activity. Strategic deviance was found to have a significant negative relationship with cash flow from next operating activities as managerial ability was higher, and this result was reconfirmed in the group with a high level of earnings management. This study is significant as it expands recent research related to management strategies by examining their impact on operating cash flow. Therefore, it seems that it is meaningful to identify the characteristics of managers in this relationship.

• The Korean Journal of Financial Management
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• v.14 no.2
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• pp.21-55
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• 1997

본 연구는 기업규모, 장부가치/시장가치 비율, 순이익/주가 비율, 현금흐름/주가 비율, 레버리지 등 기본적 변수를 사용하여 주식수익률에 유의적인 변수를 확인하고, 또한 Fama and French(1993) 등에 의해서 제시된 다요인모형(multi-factor model)이 한국주식시장에서 적용가능한 지를 살펴보았다. 이를 위하여 본 연구에서는 Fama and MacBeth(1973)의 횡단면회귀모형과 Black, Jensen, and Scholes (1972)의 시계열모형을 사용하였으며, 실증분석결과를 요약하면 다음과 같다. 먼저 횡단면분석결과에 의하면, 장부가치/시장가치 비율(BE/ME), 현금흐름/주가 비율(C/P) 등이 주식수익률의 횡단면적 차이를 설명할 수 있는 유의적인 변수로 나타났다. 그리고 통계적 의미에서는 1월효과가 존재한다고 보기 어려우나, 경제적 의미에서 1월효과가 존재하는 것으로 생각된다. 시계열분석결과에 의하면, 시장요인, 기업규모요인, 장부가치/시장가치요인(또는 현금흐름/주가요인) 등의 3요인에 의해서 국내 주식수익률의 공통적 변동을 잘 설명할 수 있다. 즉 국내 증권시장에서도 Fama and French(1993)의 3요인모형이 성립될 수 있는 것으로 판단된다.

• The Korean Journal of Financial Management
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• v.25 no.3
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• pp.1-32
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• 2008

This study examines the changes and determinants of cash to assets ratios(cash ratios) by analyzing 14,016 Korean manufacturing firms sample for the period of $1999{\sim}2004$. The major findings can be summarized as follows. First, the average cash ratios for Korean manufacturing firms have increased from 4.7 percent of 1999 to 5.2 percent of 2004. In addition, the average cash holdings per firm also have increased from 4.3 billion Won to 8.0 billion Won during the same period. However, the capital expenditures relative to cash ratios or operating cash flow have decreased significantly, confirming the notion that physical investment of Korean manufacturing sector has been shrinking recently. Second, in regression tests with panel data, the coefficients of target adjustment variables show the expected negative signs, but coefficients of the deficit of fund variables show the unexpected positive signs. Thus, the evidence seems to be supportive of static tradeoff model of cash holdings. Third, in regression tests to find the determinants of cash ratios, most of the variables show similar results as the previous studies. However, in terms of adjusted coefficient of determination and F-statistic, the firm-characteristic variables suggested by static trade-off theory have more explanatory power than the variables suggested by pecking order theory.

• Management & Information Systems Review
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• v.34 no.5
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• pp.213-231
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• 2015

In this paper, I examine whether the listed companies in Korea tend to manage operating cash flows upward via classification shifting after the adoption of K-IFRS. As proxies for cash flow management, I derive a measure of abnormal operating cash flows borrowing from Lee(2012). Alternative proxies include a series of categorical variables designed to identify the types of classification shifting of interest and dividend payments among others, in the statement of cash flows. Higher level of estimated abnormal operating cash flows, and the classification of interest/dividend payments in non-operating activity sections are considered to indicate the managerial intention to maximize reported operating cash flows. I consider several potential incentives to manage operating cash flows, which include financial distress, the credit rating proximity to investment/non-investment cutoff threshold, avoidance of negative or decreasing operating cash flows relative to previous period and so forth. In a series of empirical analyses, I do not find evidence in support of the opportunistic classification shifting explanation, inconsistent with several previous literature in Korea. In contrast, I observe negative associations between the CFO management proxies and selected incentives, which suggest that the classification is likely to represent above average cash flow performance rather than opportunistic motives exercised to maximize reported operating cash flows. I reckon that this observation is, in part, driven by the K-IFRS requirement to maintain temporal consistency in classifying interest and dividend receipts/payments in cash flow statement.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• autumn
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• pp.234-237
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• 2003

The Korean housing supply have been provided by the Pre-construction sales system. The Pre-construction sales system contributed to large housing supply. But it followed by the market anomaly. Along the housing market is changing to tile market for consumers, it requires new policy and regulations. This market changes and needs to modify the policy make a discussion about introducing the Post-construction sales system. it concerns to change the time to sale. This paper analyzes the present feasibility study and makes a tool to predict construction cashflow considering changed sales point. The sales timing leads to decide the amount of financial costs in the construction project and that cost affects to the feasibility. The accurate cashflow prediction is required for a successful apartment construction delivery.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.10 no.6
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• pp.47-57
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• 2015

This study examines whether successful stand-alone firms have more difficulties than the successful firms affiliated to business groups in external financing. The easiness of external financing is measured by investment-cashflow multiple. Controlling the effects on the multiple of the past business performances and the expectation of future business performances, we investigate how the ownership type affects the multiple. The empirical results show that, when cashflows are positive, the stand-alone firms exhibit higher investment-cashflow mupltiples. When cashflows are negative, however, the opposite is true, even though the statistical significance of the result is rather low. These results do not support the general idea that stand-alone firms must have more disadvantage than subsidiary firms in raising funds from outside. If member firms of business groups have no big trouble financing externally, then the above results imply that stand-alone firms do not either identify external financing as a major difficulty in running business. Thus, if the government seeks to formulate the selective policies supporting only the promising start-ups, instead of the general policies benefiting random start-ups, then the start-up financing policy should have a lower priority.

• Information Systems Review
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• v.13 no.3
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• pp.27-46
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• 2011

Many business managers claim that treasury management is their leading concern. Managing cash flows is the center of treasury management. However, in reality, companies has experienced the difficulty in monitoring and controling this flow initiated by business transactions. To resolve this problem, Webcash Inc. developed an innovative systems called Branch Solution. Branch Solution stands in between banking systems and a company's ERP system to connect them. This system provides the company with an ability to control the financial flow in accordance with the physical flow of materials. Due to this solution many companies accomplish a high efficiency and visibility in their cash management. This study analyses a treasury management case from the perspective of supply-chain processes integration.

• The Korean Journal of Financial Management
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• v.24 no.1
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• pp.59-83
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• 2007

In this paper, we test empirically free cash flows hypothesis about stock repurchase. The main results of this study can be summarized as follows. First, repurchasing firms do not experience a growth in profitability relative to their peer firms. Second, repurchasing firms experience a contraction in their investment opportunity, and so capital expenditures and cash reserves decline after the repurchase. Third, repurchasing firms experience a decline in systematic risk and investments and in their cost of capital. Fourth, the reduction in profitability and cost of capital are sources of the positive market reaction to the repurchase announcement. And the market reaction to stock repurchase announcements is stronger among those firms that are more likely to overinvest. Conclusively, these results support free cash flows hypothesis. When firms experience a decline in profitability, capital expenditures and cash reserves, systematic risk and cost of capital, they decide to repurchase stocks to reduce free cash flows.

• Korean Business Review
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• v.11
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• pp.241-253
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• 1998

One form of the anomalies of stock price changes as reaction to earnings information is believed to be caused by the so-called earnings fixation, which is the overreaction of stock prices to earnings. According to the Sloan (1996) study, stock price changes are positively associated with earnings at the time of earnings releases, but the association becomes negative after that, as the early overreaction is corrected. However, the problem in his study is to use cash flows computed by adjusting earnings with appropriate income statement and balance sheet items. As Bahnson et al. (1996) show, these cash flows substantially deviate from SFAS No. 95 cash flows and the sample used in this study is found to be subject to this substantial measurement error. Therefore, the result of Sloan might be driven by this error and the reexamination of earnings fixation is warranted. The results are generally consistent with those in Sloan. First, earnings is positively associated with stock price changes at the time of earnings releases, but the association becomes negative after that. Second, cash flows show a weak association with stock price changes at the time of earnings releases, but the association become stronger thereafter. Third, when seperated from cash flows, accruals have an incremental explanation about stock price changes beyond that of cash flows, accruals have a negative association later on. This finding is consistent with stock price overreaction to accruals, even when more cleaner cash flow data are used.