• Korean Business Review
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• v.18 no.2
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• pp.179-196
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• 2005

This study investigates whether the designated firm is affected by the financial characteristics prior to the korea stock exchange designating subject to administrative issues. that is, analyzes financial differences of the designated finn(AIF) from another firm(NAIF) in the same asset-scale and industry for 5 years prior to designating date. For this purpose, financial variables related with scale, profitability, growth nature, liquidity, stability, and active nature are chosen. 113 AIFs and 113 NIAFs are selected from listed stock on the korea stock exchange between 1991 and 1999. As a result, it is found that there are significant difference in all profitability, stability, active nature related financial variables for 5 years prior to each designation date. The difference is more significant as the designating date approaches. But, no significant difference is not found in all growth nature related financial variables for 5 years prior to each designation date. Liquidity related financial variables show significant difference in only the 1st year before designation date. To be short, the financial factors of profitability, liquidity, stability, and active nature have an effect on the designated firms.

• Asia Marketing Journal
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• v.15 no.3
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• pp.53-77
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• 2013

As advertising and promotions are categorized as operating expenses, managers tend to reduce marketing budget to improve their short term profitability. Gauging the value and accountability of marketing spending is therefore considered as a major research priority in marketing. To respond this call, recent studies have documented that financial market reacts positively to a firm's marketing activity or marketing related outcomes such as brand equity and customer satisfaction. However, prior studies focus on the relation of marketing variable and financial market variables. This study suggests a channel about how marketing activity increases firm valuation. Specifically, we propose that a firm's marketing activity increases the level of the firm's product market information and thereby the dispersion in financial analysts' earnings forecasts decreases. With less uncertainty about the firm's future prospect, the firm's managers and shareholders have less information asymmetry, which reduces the firm's cost of capital and thereby increases the valuation of the firm. To our knowledge, this is the first paper to examine how informational benefits can mediate the effect of marketing activity on firm value. To test whether marketing activity contributes to increase in firm value by mitigating information asymmetry, this study employs a longitudinal data which contains 12,824 firm-year observations with 2,337 distinct firms from 1981 to 2006. Firm value is measured by Tobin's Q and one-year-ahead buy-and-hold abnormal return (BHAR). Following prior literature, dispersion in analysts' earnings forecasts is used as a proxy for the information gap between management and shareholders. For model specification, to identify mediating effect, the three-step regression approach is adopted. All models are estimated using Markov chain Monte Carlo (MCMC) methods to test the statistical significance of the mediating effect. The analysis shows that marketing intensity has a significant negative relationship with dispersion in analysts' earnings forecasts. After including the mediator variable about analyst dispersion, the effect of marketing intensity on firm value drops from 1.199 (p < .01) to 1.130 (p < .01) in Tobin's Q model and the same effect drops from .192 (p < .01) to .188 (p < .01) in BHAR model. The results suggest that analysts' forecast dispersion partially accounts for the positive effect of marketing on firm valuation. Additionally, the same analysis was conducted with an alternative dependent variable (forecast accuracy) and a marketing metric (advertising intensity). The analysis supports the robustness of the main results. In sum, the results provide empirical evidence that marketing activity can increase shareholder value by mitigating problem of information asymmetry in the capital market. The findings have important implications for managers. First, managers should be cognizant of the role of marketing activity in providing information to the financial market as well as to the consumer market. Thus, managers should take into account investors' reaction when they design marketing communication messages for reducing the cost of capital. Second, this study shows a channel on how marketing creates shareholder value and highlights the accountability of marketing. In addition to the direct impact of marketing on firm value, an indirect channel by reducing information asymmetry should be considered. Potentially, marketing managers can justify their spending from the perspective of increasing long-term shareholder value.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.21 no.10
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• pp.440-453
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• 2020

Given the dynamics of the changing economic or financial conditions in Chungcheong province in the domestic capital market, foreign and domestic investments are expected to continually increase their investments in volume and size in this particular province. Considering the unprecedented business climate, it may be essential to examine the primary financial aspects, such as corporate profitability, growth rate, and capital structure, which may work as effective catalysts to enhance corporate value. Concerning the outcomes, five proposed variables, such as market-value based leverage ratio, growth rate, Tobin's Q, business risk, and R&D intensity, highlighted the significant effects to determine the current level of profitability. Moreover, two variables, such as profitability and firm size, shared commonalities to discriminate between firms in the Chungcheong province (96 firms) and their counterparts (746 firms) in the other domestic provinces in terms of the growth rate and financial leverage. In contrast, three variables, including the interaction effect and firm size, had pronounced effects on profitability. The results of the study are expected to help enhance the corporate value in Chungcheong province by controlling the level of each significant factor.

• Industry Promotion Research
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• v.5 no.3
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• pp.31-36
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• 2020

This study explores the determinants of capital structure of the hospitality industry such as hotels, lodging industry and tourism industry using financial data from 2000 to 2019. Several explanatory variables suggested by related theories and past studies were regressed with the dependent variable, debt ratio for the entire sample period, pre-crisis period and post-crisis period and the regression coefficients of the sales expenses, profitability and firm size were found to be statistically significantly negative. Especially the sign of the coefficient of the firm size was opposite to that of the manufacturing industry, which implies the uniqueness of the hospitality industry.

• Journal of the Korean Society of Food Culture
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• v.29 no.6
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• pp.593-598
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• 2014

Brands play a critical role as a core asset and the primary driver for corporate growth because of their power of identity and influence on customers' perceptions in restaurant industry. However, in spite of diverse and dynamically changing recent brand portfolio strategies of restaurants, a study on the effect of brand diversification on financial performance has been rarely conducted in the restaurant industry context. Considering competing viewpoints regarding diversification's influence on financial performance, the purpose of this study is, therefore, to examine the effect of brand diversification on firm performance of restaurants. The results indicated that brand diversification is positive effect to profitability. Brand diversification seems to be attractive and might be a reasonable growth strategy to expand market power by satisfying diverse consumer needs. Therefore, restaurant managers should be consider in implementing brand diversification strategy especially in dynamically changing trend of brand diversification in the current restaurant industry.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.11
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• pp.877-883
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• 2020

The purpose of the article is to evaluate the factors that affect the degree of environmental accounting information disclosure. Data are collected from 87 industry companies listed on the Vietnamese stock market from 2009 to 2019. I focus on the effect of factors such as the Firm size, Profitability, Leverage, Firm age, and Independent auditors. To explain the causal relationship between factors, I construct the regression model and then test it by using different statistical method approaches, including the pooled OLS, the fixed effects model, and the random effects model. Then I conduct testing of model defects: White Test, Wooldridge Test, Hausman Test, and Wald Test. The Feasible Generalized Least Squares (FGLS) method is used to analyze the image factors that affect environmental accounting information disclosure. The results show that the extent of environmental accounting information disclosure is influenced by factors: firm size, uptime and independent audit. These factors positively affect the level of environmental accounting information disclosure; independent audit has the greatest influence. Based on the research results, the author gives recommendations to improve the disclosure of environmental accounting information for industrial enterprises listed on the Vietnamese stock market, increasing the competitiveness of the public company in terms of global integration.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.10
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• pp.141-148
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• 2020

This paper analyzes factors affecting the debt maturity structure of enterprises listed on the Vietnam stock market. The panel data of research sample includes 549 non-financial listed enterprises on the Vietnam stock market from 2009 to 2019. The Generalized Least Square (GLS) tool is employed to address econometric issues and to improve the accuracy of the regression coefficients. In this research, debt maturity structure is the dependent variable. Capital structures, fixed assets, liquidity, firm size, asset maturity, profitability, corporate income tax, gross domestic product, inflation rate, credit growth scale are independent variables in the study. The model results show, that among the factors affecting the structure of debt maturity, the capital structure, asset structure, and firm size have the highest estimation coefficients, which shows that capital structure, asset structure, and firm size plays an important role in the decision-making process of debt maturity structure. The empirical results show that there are differences in the impact of these factors on the debt maturity structures in state-owned enterprises and non-state enterprises listed on the Vietnam stock market. The findings of this article are useful for business administrators, helping business managers make the right financial decisions to determine the target debt maturity structure in enterprises.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.5
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• pp.61-72
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• 2020

The purpose of this study is to investigate the determinants of the capital structure of firms operating in a developing economy, Pakistan. The quantile regression method is applied on a sample of 183 non-financial companies listed on the Pakistan Stock Exchange during the period of 2008-2017. Specifically, the empirical analysis focuses on changes in the coefficients of the determinants according to the leverage ratio quantiles of the examined listed firms. The findings show that the capital structure of Pakistan listed firms differs between firms in different quantiles of leverage. These differences are significant with the sign of explanatory variables changes with the level of leverage. The research result found tangibility, profitability and age to be positively related to leverage among listed firms in Pakistan. However, size, liquidity and non-debt tax shield (NDTS) are negatively related to leverage. A firm's growth and risk are found to be insignificant predictors of capital structure in Pakistan listed firms. Moreover, the study also found a significant impact of industry characteristic on leverage. The findings of this study indicate that an individual firm's finance policy needs to be responsive to the firm's characteristics and should match with the different borrowing requirements of listed firms.

• Asia Pacific Journal of Business Review
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• v.1 no.2
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• pp.37-62
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• 2017

To analyze the effects of R&D expenditure on the firm value of Korean firms, we classified portfolios based on R&D activity levels. After that, we conducted a time-series analysis to assess excess returns from the portfolios. To carry out such an analysis, an empirical analysis of excess returns in the capital market was performed by using the monthly earning rate of stocks from 2000 to 2013. The purpose of this research is to provide basic data on investment to stakeholders in the capital market by analyzing the effects of R&D on the firm value and to overcome scholarly limitations by offering a new model of analysis. The criteria for classifying the portfolios were based on R&D expenditure levels. The analysis models follow the Fama-French Three-Factor Model and the Carhart Four-Factor Model. The analyses results are as follows. Extrapolating monthly profit rates based on R&D expenditure levels, portfolios with low R&D expenditures showed higher earning rates than those with high R&D expenditures. This suggests that high R&D expenditures did not translate into high earning rates. The investor depreciates the R&D expenditures related profitability and the possibility of success in the market, leading to falls in stock prices and a failure to give a positive effect on the firm value. Our research differs from the previous investigations as we carried out an empirical analysis based on the actual investors' attitudes about R&D expenditures and how these can generate excess earnings. Our research results show that the data related to R&D expenditure are not reflected fully in the market.

• Journal of Korea Society of Industrial Information Systems
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• v.24 no.6
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• pp.81-93
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• 2019

As customers' needs are more diversified, the issue of managing product variety has become more important to manufacturers. It is because an increase in product variety may cause various inefficiencies in operations, while satisfying more diverse needs. Consequently, firms have introduced the concept of modularity to improve operational performance. Yet there are only a few studies which analytically investigate the effect of modularity in new product development (NPD). Therefore, this research develops an analytical model of exploring the effect of modularity on firm profitability when a component built upon new technology is introduced into an existing product, and provides important managerial implications on the NPD and technology management, which can guide the decision making on modularity in practice. The results show that it is necessary to increase modularity level when i) the product is easy to upgrade, ii) the product's price should be high due to external factors, and iii) the effect of new technology investment is uncertain, while it is desirable to increase the investment cost for introducing new products with low demand elasticity for modularity.