• The Journal of Asian Finance, Economics and Business
• /
• v.9 no.7
• /
• pp.249-260
• /
• 2022

The objective of this study was to investigate the impacts of working capital policy and strategy on a firm's performance including profitability and market value. By applying One-Sample T-Test, working capital investment and financing policies were classified into the three sub-policies and strategies: aggressive, moderate, and conservative, unlike previous studies using two sub- policies and strategies. The results showed that the SET-listed companies in all seven industry sectors primarily adopted an aggressive working capital investment policy and a conservative working capital financing policy, so-called as moderate working capital management strategy (MWS), at 49.40%. While the firms adopted and conservative working capital management strategy (CWS), 45.70%, followed by the aggressive working capital management strategy (AWS), at 4.90%. When examining the impacts among three-sub policies and strategies on a firm's performance, it was found that the conservative working capital financing policy led to the highest profitability and market value in all industry sectors. The findings also revealed that the aggressive strategy has no impact on a firm's performance in terms of profitability and market value.

• Knowledge Management Research
• /
• v.17 no.3
• /
• pp.161-179
• /
• 2016

The recent patent wars in the information technology (IT) industry demonstrate the strategic importance of IT patents in the industry. In this paper, we adopt the lens of real options to study the value of IT patents for IT firms. Specifically, we examine the relationship between IT patents and firms' market performance. We also consider the moderating effect of the innovation orientation of firms' patent portfolios (exploitative vs. explorative). Based on a large panel dataset consisting of 697 firms in US IT industries, our results suggest that the impact of IT patents on firm value (as measured by Tobin's q) is positive and significant. Further, we find that this impact varies, depending on the innovation orientation of firms' patent portfolios. IT patent portfolios with higher levels of an exploitative orientation are associated with higher firm value, compared to those with a lower exploitative orientation. This study highlights the value of employing real options theory as the underlying mechanism in understanding the impact of patents on firm valuation. Future researchers can adopt the real options lens to identify and empirically examine the role of other factors that may affect the value of patents and other investments exhibiting real option characteristics. While our paper answers some questions about the value of patents in the IT industry, it also raises a number of additional new questions. As such, we hope that it will generate more research on this important topic.

• Proceedings of the KAIS Fall Conference
• /
• 2011.05b
• /
• pp.792-795
• /
• 2011

After the year of 2000, compositions of stock holders in domestic firms are rapidly changing. In domestic stock market, the proportion of market value held by foreign investors reaches over 40%. There are several blue chip companies among those where foreign investors hold more than 50% of the stocks. There are still hot debates going on about whether the increase in the number of foreign investors contributes to domestic companies. This research attempted to determine foreign ownership increases enhance firm value empirically. It has been shown that foreign ownership variable has significant positive impact on Tobin's Q of firm value variable. The result suggests that foreign ownership increases in domestic corporations positively contribute to firm value, as they monitor and keep the management transparent as an institutional investor, and they work to soothe agency problems by the managements or the large stock holders.

• Asian Journal of Innovation and Policy
• /
• v.11 no.3
• /
• pp.277-292
• /
• 2022

This study examines the implications on the valuations of privately held firms when stakes are acquired by venture capitalists in India. In addition, the effect of fund size and revenue multiple is considered as a determinant of firm value. The study is based on a sample of 1229 rounds of funding during the period 2007-2015. The data was obtained from Venture Intelligence. Three major observations emerged based on an OLS regression. Firstly, it is observed that the stake acquired by venture capitalists has a negative effect on firm value. It supports the belief that when a firm reaches its maximum valuation from the promoter's perspective, there is a tendency to liquidate additional stakes. Secondly, a positive association between the revenue multiple and valuation is recognized. Thirdly, the convex relationship (U-shaped) between the fund size and firm valuations as seen in the case of developed economies, appears to be non-existent in India.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.11
• /
• pp.315-326
• /
• 2020

This study aims to test empirically whether the ASEAN Corporate Governance Scorecard (ACGS) has a positive effect on Sustainability Reporting (SR) and whether the ACGS and Sustainability Reporting (SR) have a positive effect on Firm Value (FV). The study was conducted in five ASEAN countries - Indonesia, Malaysia, Singapore, Philippines, and Thailand from 2014 - 2017. The research sample was collected from companies with the ACGS data and obtained with the help of 359 company observations. Hypothesis testing was performed using the Ordinary Least Square (OLS). The results of the study do not support all hypotheses. The ACGS has no effect on sustainability reporting. The ACGS has a significant negative effect on firm value, while sustainability reporting has a negative and insignificant effect on firm value. The ACGS and sustainability reporting are not good news for investors. This research's limitation is that companies rarely disclose the final value of the ACGS in their annual reports, so this research uses content analysis. The weakness of content analysis is the researchers' subjectivity so that the point of view between researchers is different. Besides, sustainability reporting for several ASEAN countries is voluntary, so not all companies can be sampled, which ultimately affects interpretation.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.8
• /
• pp.1-13
• /
• 2020

This study examines the effect of managerial ownership on firm value in capital markets where outside governance mechanisms to discipline managers are weak or non-existent. We hypothesize that strong market forces in the U.S. confound the effect of managerial ownership on firm value, i.e., the convergence of interest argument. We test the hypothesis using data from 112 firms from Singapore Stock Exchange and 205 firms from the Stock Exchange of Thailand prior to the Asian financial crisis in 1997 when the market forces were weak, yet the investor protection was sufficient to prevent outright appropriation from management. For ease of comparison, we use methodologies from studies done on the U.S. sample firms during the same study period as ours. We find that, both in Singapore and Thailand, firm value is a function of managerial ownership, and the relation is of the famous inverted U-shaped. Moreover, the relation is robust under different model specifications. The results from Thai sample, with weaker market forces than in Singapore, lend support to many agency cost hypotheses advanced in the U.S. Our results provide useful implication for investors in emerging and frontier markets where outside governance mechanisms are yet to be fully developed.

• Asia Marketing Journal
• /
• v.26 no.1
• /
• pp.11-22
• /
• 2024

In the uncertainty fueled by the COVID-19 pandemic, mergers and acquisitions (M&As) have emerged as key strategic responses by firms. This study explores the impact of M&As on acquirers' firm value, utilizing a firm-level panel dataset from SDC Platinum. Empirical evidence recognizes the potential negative impact of transaction value in M&As and the pandemic's effect on market uncertainty that may occasionally exacerbate the adverse influence on acquirers' firm value. The findings indicate that effective marketing strategies, such as enhancing consumer awareness through increasing advertising expenditures, can counterbalance these influences, particularly during uncertain times. This study accentuates the importance of adaptability and a responsive marketing approach in managing M&As during a global crisis. It provides valuable perspectives on consumer awareness in strategic decision-making, offering insights for both academic and business communities and focusing on actionable strategies for navigating the global market turmoil transformed by COVID-19.

• Korean Management Science Review
• /
• v.6 no.2
• /
• pp.73-88
• /
• 1989

This paper presents a model for analyzing a firm's competitive position. The model utilizes M. Porter's Value Chain concept and develops a framework for analyzing a firm's cost structure and identifying the sources of a firm's competitive advantage. The paper first discusses the nature of a firm's competitive advantage and identifies different types of competitive advantage a firm can pursue. The paper then introduces the concepts of cost driver and its linkage as a new way of examining organizations, and develops a model for analyzng a firm's competitive advantage. Next, it illustrates detailed procedures of the model by applying it into a real world organization, and draws some strategic implications for the organization. Finally, the paper discusses the limitations of the research and suggest future related research.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.10
• /
• pp.95-107
• /
• 2020

This study analyzes the effect of corporate social responsibility (CSR) activity on investors' heterogeneous beliefs. The hypothesis of this study is based on the conflicting effects of CSR activities on firm value and earning's quality. Investors' heterogeneous beliefs used in the empirical analysis of this study are trading volume, and CSR activity is measured by the KEJI Index (Korea Economic Justice Institute Index). This study performs an empirical analysis using regression analysis including control variables. CSR activities are found to have a positive relationship with trading volume. This is consistent regardless of the low and high accounting information (earning's quality). It can be interpreted that Korea's CSR activity acts as an incentive to increase investors' heterogeneous beliefs about target companies. In other words, it implies that the investor judges CSR activities negatively when evaluating firm value. This study could have a policy implication in that it analyzes how CSR activities affect investors' decision-making. In other words, this study analyzed CSR activities from the perspective of shareholders. Therefore, this study is expected to provide useful information for policymaking by regulatory agencies. In particular, its contribution is to presents data that CSR activities can be a negative factor in evaluating firm values.

• Journal of the Korean Operations Research and Management Science Society
• /
• v.36 no.4
• /
• pp.63-79
• /
• 2011

In this research, we have investigated the impact of servitization on firm value focused on Fortune 500 company's alliance announcement. The Firms are categorized to understand the impact of servitization and productization. The data includes Fortune 500 companies (2009, USA). Samples used for the hypothesis tests consist of 1,057 American companies that are opened on NYSE and NASDAQ, for the years 1990 through 2010. We test four research hypotheses based upon the various theoretical perspectives in servitization. The market is selective in reacting to alliance category; service company ${\rightarrow}$ manufacturing company, service company ${\rightarrow}$ service company. The findings show that alliance is significant between service company and manufacturing company. Also, the result shows significant relationship inter-service company's alliance. We have a significant relationship between company's alliance announcement and the market value of firms and shows significant AR in financial performance. Finally, this study presents implications for manufacturing companies that pursue service-led expansion as a strategic approach and are seeking to improve market value through alliance, partnership and cooperation. Continual effort must be placed to sustain market value of the firms.