• International Commerce and Information Review
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• v.1 no.1
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• pp.3-24
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• 2008

This paper examines the corporate parent effect on the diversification strategies of triad and Asian subsidiaries in the ASEAN region. I find that triad subsidiaries tend to participate in high technology intensive industries, and are more likely to diversify. In addition, I also find that the subsidiary diversification strategy is significantly affected by the number of affiliations under the same corporate parent that perform the same or different activities in the region. These results shed light on the influence of corporate parent on subsidiary-level strategy and the role of the subsidiary within an economically integrated region. Various implications are discussed.

• International Journal of Advanced Culture Technology
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• v.10 no.3
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• pp.202-209
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• 2022

This study investigates the association between corporate international diversification and audit fees and audit hours. Korean firms' overseas investment has rapidly increased in recent years and the trend of international diversification is expected to accelerate in the future. Thus, it is important to investigate how auditors respond to globally diversified firms. Our empirical findings show that internationally diversified firms incur higher audit fees and audit hours. This suggests that auditors perceive global diversification as being a higher business risk and require higher external audit fees so that they can decrease audit risk arising from inherent organizational complexity. Further, auditors expand audit procedures to collect more audit evidences, exerting increased audit effort. This study provides empirical evidences that corporate global diversification results in higher audit fees and audit hours. Auditors may refer to these results when planning their audit and determining audit fees and audit hours.

• Journal of Korea Trade
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• v.25 no.5
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• pp.74-92
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• 2021

Purpose - Utilizing a large sample of Korean firms, this study examines international diversification impacts on corporate tax avoidance and whether firms affiliated with large business groups (known in Korean as "chaebol") reinforce the relationship between international diversification and tax avoidance. Design/methodology - This paper hypothesizes that 1) international diversification is likely to increase tax avoidance, 2) the positive effect of international diversification on tax avoidance is likely to be more pronounced for chaebol firms. We examine the hypotheses by using Korean firms listed in the Korean stock market between 2011 and 2016. We employ the number of foreign subsidiaries and the entropy index as proxies for international diversification and CASH ETR and GAAP ETR as proxies for tax avoidance. Findings - Our findings are summarized as follows. First, we have found that as firms are more internationally diversified, tax avoidance increases. It means that international diversification can be employed as a method of reducing the tax burden. Second, firms affiliated with chaebol are strengthened by the positive relation between international diversification and tax avoidance. It is interpreted that chaebol firms have more effective opportunities to reduce taxes than other firms. When entering foreign markets, they can share experience and resources to decrease taxation within the large business group. Originality/value - This study provides empirical evidence regarding the tax effect of international diversification. Unlike prior studies, international diversification is positively related to tax avoidance in Korea. In addition, we present additional evidence on the chaebol effects of international diversification on tax avoidance, in which they have an advantage to reduce taxes using transfer pricing through related party transactions, income shifting to low tax rate countries, and establishing subsidiaries in tax havens.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.19 no.9
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• pp.100-107
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• 2018

This study investigated the effect of corporate international diversification on cost stickiness. A cost behavior that indicates a lower rate of cost reduction when the volume of sales decreases than the rate of cost increase when the volume of sales is increased is called cost stickiness. This cost behavior is caused by decisions made by considering the adjusting costs of the manager, and for corporate international diversification, the decision making on the adjustment cost of the manager has been reduced by the offsetting accruals hypothesis. From the empirical results, we observed that the cost stickiness of international diversified companies decreases. It is expected to contribute to the capital market and academia by identifying whether corporate international diversification can have a significant impact on management decision making related to costs.

• Journal of the Korea Convergence Society
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• v.11 no.12
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• pp.187-197
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• 2020

In this study, how international diversification of domestic companies increases corporate profits and increases the dividend income of paid-in capital investors, who provided the basis for corporate business activities in the process of distributing profits. I tried to find out if it had an effect. An empirical analysis was conducted using a fixed-effect model for companies with settlements at the end of December listed on the domestic securities market from 2011 to 2018. It was confirmed that the higher the level of international diversification of individual companies, the higher the company's dividend payout ratio and dividend yield. This means that companies can steadily expand corporate profits and dividend yield of shareholders by securing new overseas markets through international diversification, it can be seen that a company's international diversification strategy can contribute to the increase of corporate value by increasing the company's dividend payout ratio by increasing dividendable profit.

• International Area Studies Review
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• v.21 no.1
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• pp.59-77
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• 2017

Diversification strategy is important for the enterprise which intends to expand its competitive advantage. However, it is not always a success because of its different form and level which brings us totally different results also. This study analysis the effect from diversification strategy on firm performance and we divided the diversification strategy into two different level: products diversification level and international diversification level. We select financial data from 88 China listed enterprises during the year from 2008-2013 and use fixed effect model to do the analysis. According to the result, there is a positive effect between diversification strategy and firm value. A company which has the higher products diversification level and international diversification level will more possibly achieve success in diversification strategy. However, there is no significant effect on firm's profit. Considering the time effect of profit, we used after 1 year profit data and find that the enterprise which has a higher level of international diversification will have less profit, but there is also no significant effect between product diversification and firm's profit.

• Management & Information Systems Review
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• v.36 no.1
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• pp.291-307
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• 2017

This study analyzes the effects of global diversification level on discretion accruals and firm value. In order to verify the hypothesis of this study, the sample of securities companies was selected from 2012 to 2015, and the final sample is 2,139 firm-year. The results of this paper are as follows : First, discretionary accruals increased as the diversification level increased. We conducted an additional analysis as to whether the increase in information asymmetry due to international diversification affects discretionary accruals. As a result, the increase of information asymmetry due to international diversification increased discretionary accruals. This analysis is consistent with EI Mehdi and Seboui(2001)'s study. Second, we analyze the impact of international diversification on corporate value. In previous studies, there was no consistent conclusion about the relationship between international diversification and firm value(Christophe and Pfeiffer, 2002; Denis and Vost, 2002; Bodnar and Wenintrop, 1997; Bodnar et al., 2003). Therefore, this study hypothesizes that the increase in discretionary accruals, which have been driven by international diversification, will have an impact on firm value. Aa a result of the analysis, we found that the increase in discretionary accruals due to diversification declines the firm value. This means that the increase in discretionary accruals due to diversification is utilized as and opportunistic means by taking individual gain of managers.

• Korean Management Science Review
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• v.29 no.2
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• pp.167-184
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• 2012

Business diversification is inevitable to survive under the current competitive business environments. The advent of new businesses makes corporate governance more complicated through corporate combinations. Recent introduction of new accounting standard, International Financial Reporting Standards(IFRS), accelerates the need for corporate governance analysis. This study analyses the complex corporate governance system and its relation to the business performance using social network analysis. Corporate inter-governance networks can be visualized easily in a social network diagram. 552 corporate governance data are empirically analysed in the Korean stock market. The changes in In-Degree between networks are positively related with the changes in corporate sales volume. We can find the same results using operating profits as corporate performance proxy. The results show that social network analysis technique can be applied to investments in the stock markets.

• International Journal of Advanced Culture Technology
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• v.8 no.1
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• pp.135-140
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• 2020

The main battlefield of 'made in China 2025' proposed by the Chinese government is the deep integration of industrialization and informatization, among which intelligent manufacturing and new energy vehicles are the key links. New energy vehicle refers to the use of unconventional automotive fuel as a power source (or use conventional automotive fuel, the use of new vehicle-mounted power plant), integrated vehicle power control and driving aspects of advanced technology, the formation of advanced technical principles, with new technology and the structure of the vehicle. BYD's success in the battery, I T and automobile industries has attracted the attention of the industry, making it a shining new star in the Chinese business community. BYD 's innovation, diversification and corporate culture construction have certain enlightenment to the development of China's small and medium-sized enterprises. Therefore, by looking at the Chinese network literature, about BYD's research mainly focused on the development strategy, corporate finance, corporate performance, and corporate marketing, etc. This paper will take BYD as the research object and focus on corporate culture. Through literature analysis and qualitative analysis, it will summarize and further analyze the unique corporate culture of BYD, its important role, and provide relevant theoretical references for the construction and development of corporate culture in other industries.

• Journal of the Korean Regional Science Association
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• v.11 no.1
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• pp.93-111
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• 1995

This study investigated the nature of spatial concentration and dispersion of corporate control within an international system of decision-making centers. It introduces a simplified model of the global evolution of quaternary places. Linked to the national quaternary place model, the proposed model is useful for examinations involving real world situations associated with international corporations. This five stage model emphasizes the importance of the organizational structure of large corporations, industrial networks and the development of information technology. It suggests the dispersion of international quaternary places along with the diversification of corporate control linkages among quaternary centers. A case study for 1974-1991 uses information statistics to identify the current stage of the international quaternary system. The result is in general agreement with major elements of the stage model. This theoretical concept and empirical research contribute to the expansion of quaternary place theory to the global scale in particular, and to the development of location analysis in general.