• Korean small business review
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• v.42 no.4
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• pp.123-146
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• 2020

This study, targeting KOSDAQ-listed companies, examined the relationship between variability of accruals and corporate characteristics. First, the analysis results show that executives of companies with high debt ratios are more likely to violate debt contracts, so there is a strong temptation to use discretionary accrual items. Second, for companies with large volatility in operating cash flows, Executives of these companies are strongly inclined to utilize accruals for the purpose of abuse of discretion. Third, the larger the company, the more sensitive it is to political costs, so it is less tempted to use the accruals item than a smaller company. Fourth, the corporate age is thought to be the maturity of the company, Executives of such companies have little room to use accruals to abuse their discretion. Fifth, in the case of profit dummy variables, the companies reporting losses have more temporary accrual items than those reporting profits, so this increases the uncertainty in their accounting information than the latter. Sixth, for those companies that are indicated as inappropriate as a result of audit, the more likely their executives are to use the accrual items, and the lower the quality of their accounting profits is. Lastly, Companies audited by 4 Big domestic accounting firms have less discretionary accrual fluctuations than companies audited by non-big 4 accounting firms. Thus, it was found that the accrual amount allows the discretion of corporate executives differently according to the characteristics of the company.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.8 no.2
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• pp.21-33
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• 2013

This study analyzes the effects of diversification on business results and enterprise values of KOSDAQ-listed venture companies to inquire into the effective diversification strategies of venture companies after an initial public offering (IPO). In particular, this study used the Berry-Herfindahl index as a proxy variable regarding the level of diversification of venture companies, and categorized the diversification methods into M&As, strategic partnerships and establishment of subsidiaries to analyze the effects of the mutual interaction among such methods. The following is a summary of the results of the analysis. First, diversification did not have any statistically significant effects on business growth. However, it was found that there was an inverted U-shaped relationship between diversification and the profitability of the company. Second, although no statistical significance was found between enterprise values measured based on diversification and market value, a U-shaped relationship or positive relationship was found. Third, M&As were found to moderate the relationship between diversification and business results and enterprise values. Fourth, strategic relationship and establishment of subsidiaries was found to moderate the relationship between diversification and the profit results of the company. Based on the above findings, this study discovered the practical implications regarding the diversification of venture companies after listing on the KOSDAQ.

• Journal of Distribution Science
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• v.15 no.8
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• pp.47-54
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• 2017

Purpose - According to agency theory, managers have incentives to adjust firm revenues to meet earnings expectations or delay bad news disclosure because of performance-based compensation and their reputation in the market. When the bad news accumulates, stock prices fail to reflect all available information. Thus, market prices of stocks are higher than their intrinsic value. After all, bad news crosses the tipping point, it comes out all at once. That results in stock crashes. Auditors can decrease stock crash risk by reducing agency costs through their informational role. Especially, stock price crash risk is expected to be lower for firms adopting high-quality audits. We focus on distribution and service industry to examine the relation between audit quality and stock price crash risk. Industry specialization and auditor size are used as proxies for auditor quality. Research design, data and methodology - Our sample contains distribution and service industry firms listed in KOSPI and KOSDAQ during a period of 2004-2011. We use a logistic regression to test whether auditor quality influences crash risk. Auditor quality was measured by industry specialist auditor and Big4 / non-Big4 dichotomy. Following the approach in prior researches, we use firm-specific weekly returns to measure crash risk. Firms experiencing at least one stock price crash in a specific week during year are classified as the high risk group. Results - The result of analyzing 429 companies in distribution and service industry is summarized as follows: Above all, it is shown that higher audit quality has a significant negative(-) effect on the crash risk. Crash risk is alleviated for firms audited by industry specialist auditors and Big 4 audit firms. Therefore, our results show that hypotheses are supported. Conclusions - This study is very meaningful as the first study which investigated the effects of high audit quality on stock price crash risk. We provide evidence that high-quality auditors reduce stock price crash risk. Our finding implies that the risk of extreme losses can be reduced through screening of high-quality auditors. Therefore investors and regulators may utilize our findings in their investment and rule making decisions.

• Journal of Intelligence and Information Systems
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• v.25 no.2
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• pp.99-122
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• 2019

According to the recent IDC (International Data Corporation) report, as from 2025, the total volume of data is estimated to reach ten times higher than that of 2016, corresponding to 163 zettabytes. then the main body of generating information is moving more toward corporations than consumers. So-called "the wave of Big-data" is arriving, and the following aftermath affects entire industries and firms, respectively and collectively. Therefore, effective management of vast amounts of data is more important than ever in terms of the firm. However, there have been no previous studies that measure the effects of big data investment, even though there are number of previous studies that quantitatively the effects of IT investment. Therefore, we quantitatively analyze the Big-data investment effects, which assists firm's investment decision making. This study applied the Event Study Methodology, which is based on the efficient market hypothesis as the theoretical basis, to measure the effect of the big data investment of firms on the response of market investors. In addition, five sub-variables were set to analyze this effect in more depth: the contents are firm size classification, industry classification (finance and ICT), investment completion classification, and vendor existence classification. To measure the impact of Big data investment announcements, Data from 91 announcements from 2010 to 2017 were used as data, and the effect of investment was more empirically observed by observing changes in corporate value immediately after the disclosure. This study collected data on Big Data Investment related to Naver 's' News' category, the largest portal site in Korea. In addition, when selecting the target companies, we extracted the disclosures of listed companies in the KOSPI and KOSDAQ market. During the collection process, the search keywords were searched through the keywords 'Big data construction', 'Big data introduction', 'Big data investment', 'Big data order', and 'Big data development'. The results of the empirically proved analysis are as follows. First, we found that the market value of 91 publicly listed firms, who announced Big-data investment, increased by 0.92%. In particular, we can see that the market value of finance firms, non-ICT firms, small-cap firms are significantly increased. This result can be interpreted as the market investors perceive positively the big data investment of the enterprise, allowing market investors to better understand the company's big data investment. Second, statistical demonstration that the market value of financial firms and non - ICT firms increases after Big data investment announcement is proved statistically. Third, this study measured the effect of big data investment by dividing by company size and classified it into the top 30% and the bottom 30% of company size standard (market capitalization) without measuring the median value. To maximize the difference. The analysis showed that the investment effect of small sample companies was greater, and the difference between the two groups was also clear. Fourth, one of the most significant features of this study is that the Big Data Investment announcements are classified and structured according to vendor status. We have shown that the investment effect of a group with vendor involvement (with or without a vendor) is very large, indicating that market investors are very positive about the involvement of big data specialist vendors. Lastly but not least, it is also interesting that market investors are evaluating investment more positively at the time of the Big data Investment announcement, which is scheduled to be built rather than completed. Applying this to the industry, it would be effective for a company to make a disclosure when it decided to invest in big data in terms of increasing the market value. Our study has an academic implication, as prior research looked for the impact of Big-data investment has been nonexistent. This study also has a practical implication in that it can be a practical reference material for business decision makers considering big data investment.

• The Korean Journal of Financial Management
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• v.24 no.4
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• pp.135-161
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• 2007

In this paper, we study empirically the dividend initiation decisions of IPO firms listed on Korea Securities Market and KOSDAQ Market. Specifically, we study three aspects of dividend initiation decision, (a) dividend initiation decision, (b) dividend level decision, (c) time-to-initiation decision. The main results of this study can be summarized as follows. First, determinants suggested by the major theories of dividends, namely, residual dividend, dividend signaling, agency, catering, and transactions cost theory explain significantly the dividend initiation decision. Second, determinants suggested by the major theories of dividends explain significantly the dividend level decision. So to speak, most of the findings for dividend initiation decision also hold for the dividend level decision. Third, most of the factors that increase(decrease) the probability of dividend initiation reduce(increase) the time-to-initiation. Almost of the dividend initiation firms start paying dividends within two years of the IPO. Thus, if IPO firm does not initiate dividend early in the life of the firm, then it is highly likely that it will never initiate dividend.

• The Journal of Industrial Distribution & Business
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• v.10 no.11
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• pp.49-56
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• 2019

Purpose: Corporate social responsibility is a self-regulating business model that helps a firm be socially accountable to the public. By practicing corporate social responsibility, firms can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. Corporate social responsibility activities are not directly linked to increasing corporate performance and corporate value, but rather involve spending expenses. Based on these facts, this study verifies whether the effects of corporate social responsibility activities differ depending on the firm's situation. Research design, data and methodology: This study analyzed the effect of market competition on corporate social responsibility activities using logistic regression analysis on listed companies in the KOSPI and KOSDAQ for fiscal years 2014 through 2016. In this study, market competition was measured using the Herfindahl-Herschman Index(HHI). Higher HHI value can be interpreted as a lower degree of market competition. We also measured corporate social responsibility activities using the KEJI Index published by the Korea Economic Justice Institute (KEJI). If a firm-year is included in the top 200 companies of the KEJI Index, it is classified as a good corporate social responsibility activity firm. Results: We find that companies in less competitive market were not included in the KEJI Index. This result indicates that firms in the market with lower market competition perform less corporate social responsibility activities that incur costs. An additional analysis showed that there was a significant negative relationship between the market competition and the corporate social responsibility activity scores published by the KEJI Index. These result adds robustness to the result of the hypothesis that firms that have a monopolistic place in the market practice passive corporate social responsibility activities. Conclusions: The results show that managers of a firm in the lower market competition have a lower incentive to use limited resources for projects that are not directly related to revenue. The results of this study imply that corporate social responsibility activities vary according to the position of the business. Therefore, this study suggests that market investors should consider the degree of competition in the market when they evaluate corporate social responsibility activities.

• The Korean Journal of Financial Management
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• v.27 no.1
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• pp.89-120
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• 2010

In this paper, we analyse empirically the relations between ownership structure and cash holdings of firms listed on Korea Securities Market and Kosdaq Market of Korea Exchange. The main results of this study can be summarized as follows. Cash holdings increase as large shareholder's equity holdings increase. Cash holdings increase as the difference between first largest shareholder's and second largest shareholder's equity holdings increase, and cash holdings increase as the ownership concentration increase. Managerial ownership exert a non-linear effects on cash holdings. So to speak, at lower level of managerial ownership, managers hold more cash to pursue their own interests at the expense of minority shareholders, but at higher level of managerial ownership, the interests of managers and shareholders are aligned, and also at highest level of managerial ownership, managers hold more cash to pursue their own interests at the expense of minority shareholders. Cash holdings increase larger in owner-controlled firm than in management-controlled firm. These results support the expropriation of minority shareholders hypothesis that large shareholders can extract private benefits from corporate resources under their control at the expense of minority shareholders. This paper contributes to defining information value of large shareholder's equity holdings on cash holdings for a firms' other stakeholders such as investors and creditors, and to strengthening a legal and institutional safeguard for external minority shareholders. Ownership concentration might have negatively affected the evolution of the legal and institutional frameworks for corporate governance and the manner in which economic activity is conducted. It could be a formidable barrier to future policy reform.

• The Korean Journal of Financial Management
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• v.27 no.1
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• pp.63-87
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• 2010

This paper empirically examines whether ownership disperses when a venture firm its IPO (initial public offerings). The data for this study were collected from 91 firms that were initially listed on KOSDAQ between January 1, 2004 and December 31, 2007. We explored the influence of the underpricing of IPO on the change of large shareholders. The first finding of this investigation is that the number of shareholders of the venture firms who underpriced IPOs still increased after the closing of lockup. This is consistent with the findings of Booth and Chua(1996) and Brennan and Franks(1997). Second, the share of the large stockholders of the venture firms that a venture capital company invested decreased significantly after the end of lockup. Third, the venture businesses with higher ratio of flotation showed a significant decreasing of shareholders after the closing of lockup.

• Journal of Korea Entertainment Industry Association
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• v.15 no.6
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• pp.55-70
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• 2021

This study investigates the following important financial questions using entertainment enterprises: 1) how does cash reserve affect a firm's financial value? 2) what factors influence the level of cash retention of a firm? For empirical tests, we use accounting and financial data of entertainment companies listed in the KOSPI and KOSDAQ markets for a long-term time period covering from 2000 to 2018. The main findings of this paper are as follows: First, entertainment companies maintain higher level of cash holdings compared to non-entertainment companies. Second, the cash holdings of entertainment enterprises have positive influence on firms' financial value. Third, among various firm characteristics known for affecting the cash holdings level, leverage and profitability exhibit strong relationships in entertainment enterprises. Entertainment firms with lower leverage and higher profitability tend to reserve more cash inside them. These findings suggest that entertainment companies are highly valued by stock market participants as having prospective opportunities, thus, firms with sufficient cash holdings tend to have higher firm value. In addition, these findings imply that cash in entertainment enterprises functions as a substitute for debts and the cash holdings are less likely driven by agency problems.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.2
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• pp.15-30
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• 2019

This study investigates the effects of venture capital investment and corporate venture capital investment on the performance of IPOs listed on KOSDAQ between 2000 and 2014. We classified venture firms with venture capital-backed companies and non-venture capital-backed companies, having the former of which further divided into corporate venture capital-backed companies and independent venture capital-backed companies. The time window of the analysis was set to between 2 years before and 3 years after IPO. Main results of this study reveal that there is little difference between venture capital-backed companies and non-venture capital-backed companies in terms of profitability before and after going public. However, we found out that after IPO venture capital-backed companies display higher ROA than independent venture capital-backed companies or non-venture capital-backed companies, suggesting that corporate venture capital-backed companies might be more advantageous in growing a venture capital ecosystem in Korea.