• Management Science and Financial Engineering
• /
• v.16 no.2
• /
• pp.1-15
• /
• 2010

Digital convergence which means the convergence of industry areas related to digital technologies is an important phenomenon in business, which will decide the fates of firms in the near future. The only firms which can create synergy effects from digital convergence are expected to be the winners in the fierce competition of digital convergence era. In our analysis, we examine the strategy of an integrated firm which has businesses in two different industry areas which are related to each other. By using a game theoretical model, we show how the integrated firm can win over two single separated firms which have business in only one industry area each by leveraging the two businesses the integrated firm has. In our welfare analysis, we also show that this convergence may be even beneficial to consumers, which seems counter-intuitive to social concerns about anti-competitive behaviors by integrated firms. Additionally, we study comparison between industry convergence and product convergence.

• Management Science and Financial Engineering
• /
• v.2 no.1
• /
• pp.147-176
• /
• 1996

The main objective of this study is to uncover the differences in the programming behavior between methodology creators and methodology users. We conducted an experiment with methodology creators who have invented one of the major object-oriented methodologies and with professional programmers who have used the same methodology for their software-development projects. In order to explain the difference between the two groups, we propose a theoretical framework that views programming as search in four problem spaces: representation, rule, instance and paradigm spaces. The main problem spaces in programming are the representation and rule spaces, while the paradigm and instance spaces are the supporting spaces. The results of the experiment showed that the methodology creators mostly adopted the paradigm space as their supporting space, while the methodology users chose the instance space as their supporting space. This difference in terms of the supporting space leads to different search behaviors in the main problem spaces, which in turn resulted in different final programs and performance.

• Korean System Dynamics Review
• /
• v.3 no.1
• /
• pp.105-129
• /
• 2002

IT companies make a lot of efforts for sharing and utilizing of experiences of their members and transforming them into the organizational knowledge as a competitive core. But they face a dilemma that they have to spend time and financial resource to perform activities around knowledge management for the long-term gains, while carrying field-works for making short-term profits. As an initial attempt to tackle this managerial problem, this paper try to investigate the mechanism of knowledge management in a small IT company in Korea with a synthetic view-point using system dynamics simulation model. It depicts the dynamic behaviors of knowledge management and presents some findings of political leverage. Although it has to be replenished further, the scheme for the dynamism of knowledge management and the findings presented in the paper could be useful for the decision makers particularly of knowledge-intensive organizations

• Management Science and Financial Engineering
• /
• v.19 no.2
• /
• pp.1-11
• /
• 2013

An interesting puzzle in business practices is that although many researchers emphasize the benefits of a revenue-sharing contract, a wholesale contract has remained to be the most common contractual form. By introducing the concept of unobservable efforts, we examine the contractual efficiency of a wholesale contract and a revenue-sharing contract. The multi-task agency model and experimental design approach are used to analyze the relationship between the contractual efficiency and parameters. A major finding of our study is that a wholesale contract coordinates unobservable efforts, while it fails to coordinate the order quantity decision. Because unobservable efforts have mixed effects on the contractual efficiency, the superiority of contract type depends on parameters. This finding implies that a wholesale contract can be a competitive contract, especially when unobservable efforts are heavily involved. Our conclusion is that the current popularity of a wholesale contract is manager's rational response to complex supply chain environments rather than irrational behaviors.

• Management Science and Financial Engineering
• /
• v.21 no.1
• /
• pp.19-24
• /
• 2015

As decision makers do not make optimal decisions in practice despite the existence of optimal solutions in many models, there has been a rising interest in behavioral operations management recently. In this study, we aim for a comparative study to analyze the inventory decisions in Korea, America, and China, by conducting the same newsvendor experiment in Korea and compare the results with those of previous studies. From the comparative analysis, some national characteristics in decision-making processes have been observed but there is lowly significant difference in order quantities among the three groups. Korean students show lower level of understanding in demand distributions and tendencies of anchoring on the mean demand and being risk-averse. The finding that individuals make their own decisions differently based on their different behaviors suggests that we need to consider individual approach in analyzing human decision-making processes rather than adapting aggregate approach.

• Journal of Digital Convergence
• /
• v.7 no.4
• /
• pp.21-30
• /
• 2009

Public and private sectors are experiencing a worldwide economic depression originated from the failure of U.S. financial system. At a harsh time like this, policy-makers need to understand more about the effects of the creative leadership in the digital era. However, there haven't been enough studies performed on this field in Korea. This study aims to fill the blank and learn more about the correlation between creative leadership and organizational effectiveness. To achieve this goal, various previous leadership studies have been reviewed in terms of organizational behaviors, comparative culture studies, and etc. In the end, this study argues previous qualitative studies' weaknesses and limitations, and tries to suggest new aspect of qualitative research method of creative leadership.

• Journal of applied mathematics & informatics
• /
• v.41 no.1
• /
• pp.33-50
• /
• 2023

Foreign exchange options are derivative financial instruments that can exchange one currency for another at a prescribed exchange rate on a specified date. In this study, we examine the analytic formulas for vulnerable foreign exchange options based on multi-scale stochastic volatility driven by two diffusion processes: a fast mean-reverting process and a slow mean-reverting process. In particular, we take advantage of the asymptotic analysis and the technique of the Mellin transform on the partial differential equation (PDE) with respect to the option price, to derive approximated prices that are combined with a leading order price and two correction term prices. To verify the price accuracy of the approximated solutions, we utilize the Monte Carlo method. Furthermore, in the numerical experiments, we investigate the behaviors of the vulnerable foreign exchange options prices in terms of model parameters and the sensitivities of the stochastic volatility factors to the option price.

• The Korean Journal of Financial Management
• /
• v.27 no.2
• /
• pp.1-33
• /
• 2010

This study explores if the higher initial returns and the poorer long-run performance observed in the IPOs markets are associated with the firms offered in the 'hot markets,' and then empirically examines the effect of optimistic investors' sentiment on this phenomenon, particularly in the aspects of both pricing mechanism and the opportunistic behavior of offering firms. We analyzed a total of 432 IPO firms for the years between 2001 and 2005. This analysis finds that the initial returns and long-run under-performances of 'IPOs in the hot market' are significantly higher than those of 'IPOs in the cold market.' This study also finds that the proxy variables for the optimistic investors' sentiment have a positive effect on the initial return and negative effect on the long-run performance. Finally, this research finds no difference of ownership structure, venture capital backed, and financial properties between hot market IPOs and cold market IPOs. R&D expenditure rate and financial qualities of IPOs are higher in the hot market than in the cold market. These results do not support the 'windows of opportunity' hypothesis that low quality firms take advantage of hot market condition for successful IPOs.

• Journal of Distribution Science
• /
• v.14 no.6
• /
• pp.75-80
• /
• 2016

Purpose - A growing demand for sustainability reporting has placed pressure on firms with non-financial information that affects firm valuation, growth, and development. In particular, a number of researchers have investigated various topics in Corporate Social Responsibility (CSR), non-financial information. Prior studies suggest that CSR may affect corporate outcomes like corporate reporting, financial performance, and disclosures. However, the results from prior studies are not clear whether CSR affects corporate outcomes. This is partially due to the measurement issues with CSR. In this study, we examine whether CSR affects the quality of corporate reporting, one of the popular measures in corporate outcomes. We find an evidence that CSR positively affects the quality of corporate reporting. Research design, data, and methodology - In this study, we collected a unique dataset of CSR from MSCI. Total 169 firms listed in the Korean Stock Exchange from 2011 to 2014 were collected and analysed with the detailed CSR reports. Using a correlation test, we found a weak association between CSR and the quality of corporate reporting. However, the regression tests provided a strong relationship between CSR and the quality of corporate reporting after controlling for other variables that may affect the quality of corporate reporting. Additionally, we calculated the t-statistics based on heteroskedaticity-consistent standard errors (White, 1980). Results - Before we run the regression test, we sort the measures of the two dependent variables into each rating of CSR (from AAA to CCC). The results indicate that the quality of corporate reporting measured by discretionary accruals and performance-matched discretionary accruals monotonically decrease as the CSR ratings increase. This supports our hypothesis. In the regression tests, the coefficient on MJDA (PMDA) is -0.183 (-0.173) and significant at the 5% level. We can interpret the results as CSR affecting the quality of corporate reporting in positive ways. Other coefficients on control variables are consistent with prior studies. For example, the coefficients on both LOSS and LEV are positive and significant at conventional level, meaning that firms with financial difficulty may harm their quality of corporate reporting. Conclusion - We found an evidence that CSR is positively associated with the quality of corporate reporting. This study contributes to the literature in various ways. First, this study extends the line of CSR research by providing additional evidence in the setting of ethical behaviors by managements. This is consistent with the hypothesis and supports the results of prior studies. Second, to the best of my knowledge, this is the first study using the MSCI CSR ratings. In contrast with prior studies using different measures of CSR, the MSCI CSR ratings allow us to provide in-depth analysis. Third, the additional measure of dependent variable (PMDA) allows us to improve the robustness of our results. Overall, the results provided this study to extend the findings in prior studies by providing incremental evidence.

• International Area Studies Review
• /
• v.22 no.1
• /
• pp.123-140
• /
• 2018

This paper analyzes herd behavior observed in the loan market from 2001 to 2014 using a panel data on commercial banks including state-owned banks, domestic private banks, foreign banks, and Islamic banks. The paper finds evidence that herd behaviors of domestic private and foreign banks have been pronounced and long-lasting around the 2008 global financial crisis when state-owned banks did not show such a behavior. This result shows that since private banks tend to be keen on maximizing profits and avoid financial risks exposed by lending during a financial crisis, their lending decisions are not independent but dependent on whether other banks increase loans or not. On the other hand, Islamic banks do not show herd behavior during the financial crisis. This finding is consistent with earlier studies that Islamic banks have different characteristics, such as profit and operation mechanisms, from other private banks. Another interesting finding is that when it comes to rural loans, all the banks' herd behavior is short-lived and the herding indexes are quite volatile. This finding is attributable to distinct features of rural loans. Usually maturities of rural loans are shorter than city loans and related to the cycle of farming. Agricultural production is heavily dependent on unpredicted factors, such as floods and droughts, not previous year's production. Lastly, the paper finds a herding across bank type that state-owned, foreign, and Islamic banks follow domestic private banks'lending decisions.