• Proceedings of the Technology Innovation Conference
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• 2004.02a
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• pp.288-315
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• 2004

This paper has examined the leapfrogging thesis with the case of catch-up in digital TV by the Korean firms. Despite the disadvantages implied by the technological regime of digital TV and the risks facing early entrants in trajectory choice and initial market formation, the Korean firms had achieved a 'path-creating catch-up' in the sense they chose a different path from the Japanese forerunning firms. As they have been closely watching the technological trends and the standard setting process, there was less risk of choosing the right or wrong technological trajectory. Also, despite the lack of sufficient capability and core knowledge base, the Korean firms had some complementary asset, such as the experience of producing analogue TV, and were able to develop the prototype digital TV and the ASIC chips, given the accesses to the foreign knowledge via overseas R&D posts and acquisition of a foreign company. To secure the initial market size, the Korean targeted the US market from the beginning, and their sources for competitive advantages were the speedy setting up the production system for mass production of products at the initial stage. The initial failure of the Japanese firms and the success of the Korean firms do suggest that the period of paradigm shift, like this toward digital technology, can serve as a window of opportunity for late-comers while penalizing the forerunner.

• Journal of Korea Trade
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• v.24 no.1
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• pp.1-34
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• 2020

Purpose - In this study, we investigate determinants of hedging with derivatives and its effect on firm value and firm risk for Korean firms. Design/methodology - To avoid the endogeneity problem pointed out in previous studies, we use a two-stage analysis by using gains and losses from derivatives as instrument variable for hedging with derivatives. Findings - Our analysis on the determinants of hedging shows that firms that are more leveraged and less profitable, and with more growth opportunities are likely to hedge through derivatives. Additionally, large firms, firms less diversified into industry, and firms more diversified geographically are likely to use derivatives. Our two-stage analysis shows that indicators of hedging with derivatives have an insignificant effect on firm value, and the indicator of futures/forwards use and of swaps use have significant negative effect on firm value. Whereas, the extent of hedging with derivatives has positive effect on firm value for all types of foreign currency derivatives, which suggests that moderately low hedgers use derivatives inefficiently, but extensive hedgers use derivatives properly. With regard to firm risk, hedging with derivatives increases market-based risk, but decreases accounting-based risk. Thus, we conclude that Korean firms use derivatives to manage operational volatility rather than to manage market risk, and accounting-based risk reduction through hedging is not directly translated into higher firm value. Originality/value - This is not the first study to investigate hedging behavior of Korean firms, but the sample period that that this study analyzed is the longest and various method are used to control the endogeneity problem. We investigate not only total foreign currency derivatives but also by types of derivatives, including futures/forwards, options, and swaps.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.5
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• pp.627-637
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• 2021

This research extends the literature on the effect of board characteristics and ownership structure on audit fees; these factors affect the firm's agency costs and how the auditor assesses various risks, hence the audit efforts and fees. The paper introduces political connections as a determinant of audit fees for the first time in Jordan, where the political connection is prevalent and affects decision making on the Jordanian boards. The sample consists of 109 manufacturing and service firms listed on the Amman Stock Exchange (ASE) over the years 2012-2019. Data is obtained from the ASE and the company's annual reports. Board characteristics are measured by board size, independence, leadership duality, meetings frequency, political connections, and audit committee. Ownership structure was measured by concentration, foreign ownership, and Institutional ownership. The study hypotheses were tested by using Generalized Least Squares regression. The Findings showed that larger boards, politically connected firms, and firms with leadership duality are more likely to pay higher fees. Besides, Firms with greater foreign ownership pay less fees, whereas the rest of the variables are insignificant. Results suggest that political connections play a major role in determining audit fees; this provides a recommendation to policymakers in Jordan to reconsider regulations regarding political connections.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.8
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• pp.487-496
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• 2021

This study examines the environmental performance of firms in Vietnam and its determinants. The contribution of the paper is on both theoretical and empirical aspects. On the theoretical matter, the research proposes a new index measuring environmental management at the firm level, namely the Environmental Management Index with a clear illustration for the case of Vietnam. On the empirical matter, the study points out and estimates determinants of the corporate environmental performance of Vietnamese firms measured by the newly proposed index. Due to data availability and the impossibility of getting more updated data, the empirical analysis covers only the period from 2004-2009. However, findings are still meaningful because, on the one hand, it provides some evidence for Vietnamese policymakers; on the other hand, with the robust methodology proposed, when more recent data are available, researchers can easily replicate the estimation for more insights. Empirical results show that factors having positive impacts on the environmental performance of Vietnamese firms are profit, capital stock, and interestingly public pressure proxied by the population of the province where the firm is located. Firm ownership does also matter in explaining the corporate environmental performance of Vietnam.

• Management Science and Financial Engineering
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• v.22 no.1
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• pp.21-26
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• 2016

We analyze how firms' global production activities affect their inventory supply and financial performance in regards to its production location. For the analysis, we use information on global production quantities of 3,076 Korean multinational firms that operate business in Europe and Asia through foreign direct investment (FDI) from 2006 to 2013. Our estimation results show that an increase in global production ratio, measured by global production/total production, decreases inventory supply and financial performance of firms that produce in European countries, while it decreases financial performance of firms that produce in Asian countries. Although our results indicate that global production decreases financial performance of firms that produce in Europe and Asia, we find that its negative effects on financial performance are different based on the market demand uncertainty.

• The Journal of the Korea Contents Association
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• v.12 no.3
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• pp.285-294
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• 2012

Under conditions of increasing environmental uncertainty, firms' risk management become important. This study examines the impact of foreign currency derivative usage on firm value using 3,004 Korean non-financial firms from 2002 to 2007. The results showed that there was no significant relationship between foreign currency derivative usage and firm value for the whole period and from 2002 to 2004 when exchange rate was relatively less volatile. But form 2005 to 2007 when exchange rate was volatile, foreign currency derivative usage gave significant negative impact on firm value, whereas when contract value was used, the relatinship was significantly positive. These results might be come from the characteristics of contract value and fair value of foreign currency derivatives. increased firm value when contract value was used as foreign currency derivative usage measure. But when fair value was used, there was no significance. For control variables, major shareholders ownership and foreign blockholders ownership was positively related with firm value.

• Management & Information Systems Review
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• v.28 no.2
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• pp.113-134
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• 2009

The purpose of this paper is to investigate the relationship between foreign ownership and firm value. Based on the sample of 3,398 firm-year observations in the period of 2000 to 2007, we find evidence that foreign ownership is positively associated with firm value measured by the market-to-book ratio. In addition, we employ simultaneous equation system where both foreign ownership and firm value are treated as endogenous variables. Simultaneous regression models indicate that the foreign ownership affects firm value, but not vice versa. The positive effects of foreign ownership on firm value result from monitoring and disciplining roles played by foreign investors. Many Korean firms have been run by an owner-manager while monitoring provided by institutional equity holders has been limited. Therefore, Korean firms are expected to suffer from more severe agency costs caused by the conflicts of interest between owner-managers and outside investors. Our empirical results support the notion that foreign investors play an important role in enhancing corporate transparency and improving corporate governance.

• The Journal of the Korea Contents Association
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• v.17 no.11
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• pp.135-142
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• 2017

The importance of trade cooperation with foreign countries is becoming higher in order to utilize the competitiveness of its own country's industries. In Korea, the government has made various efforts to respond to the expansion of foreign trade cooperation. As time goes by, it is needed to redefine and reestablish the functions of industrial polices in order to improve the effectiveness and efficiency of foreign trade cooperation. We focus on the industrial and trade policies related to FTA. Mainly we do research the impact (before and after FTA) of industry, trade policies, and firms' management activities on the export-oriented firms. For this end we conduct a survey on the firms' evaluation of the trade related policies and analyze with the panel data regression model. According to the results, in order to enhance the utilization of FTA, the connection with export support program, the training of expert HRs, and the prohibition of double regulation are the main influential policies.

• Journal of the Korean Society of Clothing and Textiles
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• v.26 no.7
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• pp.958-969
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• 2002

No one doubts that textile and apparel industries have contributed to economic miracles of the export-led growth in Korea. However, by the turning of 1990′s, these sectors have encountered many problems such as decreasing of domestic production and exports mainly due to wage rise and shortage. Therefore, foreign direct investment to the low labor cost countries has been enlarged for a way of improving its competitiveness and increasing exports. However, no intensive study has been made exploring current investments and future directions. This study focuses Vietnam as one of the promising overseas investment countries. The purposes of this study are to analyze current investment status of Korean textiles and apparel firms in Vietnam, to explore merits and problems Vietnam has, and to present useful implications and strategies for Korean textiles and apparel companies. Analysis of current secondary data suggests that Korean apparel industry, rather than textiles industry, have invested more in Vietnam, mostly in southern Ho Chi Minh City. Investments of Korean apparel and textile firms have shown steady increase from 1990 but have turned to a decrease from 1995. Findings suggested that Vietnam has merits for attracting foreign investment since it provides relatively cheap labor and outstanding skillful hands suitable for apparel and textiles industries. In addition, because of EU quota increase and the trade agreement between Vietnam and USA it is likely for firms in Vietnam to increase exports to EU and USA Rapid expansion of domestic apparel market and "Korean trend (Han Rue)" in Vietnam resulted from successful star marketing of Korean firms are another merits Vietnam has to the Korean fm. However, regulations of central government, low efficiency of bureaucratic and stiff administrative process, difficulty of making decision in case of joint venture, lack of social overhead capital, high factory construction costs, weak construction condition, and the excessive competition among investment enterprises have found to be problems. Based on pros and cons of investment to Vietnam, marketing strategies, practical implications and future directions were suggested.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.14 no.1
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• pp.101-108
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• 2013

In this paper, we examine the impact of family ownership mechanism on the firm's debt policy. Our results show that family firms tend to have a lower debt level, compared with non-family firms. Foreign investors are found to lead to a reduction in the firm's debt level through their monitoring incentives for dominating large shareholders. The firm's profitablily is related to a lower level of debt, whereas higher tangible assets and firm size are positively associated with high debt ratios due to the possibility of large collateral assets. Some implications are that foreign investors can reduce the agency costs of dominating large shareholders in family firms through monitoring activities, thus enhancing the efficiency of business decision-makings.