• East Asian Economic Review
• /
• v.17 no.3
• /
• pp.261-279
• /
• 2013

Using firm-level panel data for Korean multinational enterprises (MNEs), we make a distinction between being the only affiliate of a parent firm and being one of the multiple affiliates of a parent firm. In particular, we attempt to find a correlation between the sales of foreign affiliates and the productivity of multinational firms. Our main empirical results in this paper suggest that productive Korean MNEs would enlarge the number of affiliates in the host country.

• Journal of applied mathematics & informatics
• /
• v.15 no.1_2
• /
• pp.109-126
• /
• 2004

This paper deals with two problems of optimal portfolio strategies in continuous time. The first one studies the optimal behavior of a firm who is forced to withdraw funds continuously at a fixed rate per unit time. The second one considers a firm that is faced with an uncontrollable stochastic cash flow, or random risk process. We assume the firm's income can be obtained only from the investment in two assets: a risky asset (e.g., stock) and a riskless asset (e.g., bond). Therefore, the firm's wealth follows a stochastic process. When the wealth is lower than certain legal level, the firm goes bankrupt. Thus how to invest is the fundamental problem of the firm in order to avoid bankruptcy. Under the case of different lending and borrowing rates, we obtain the optimal portfolio strategies for some reasonable objective functions that are the piecewise linear functions of the firm's current wealth and present some interesting proofs for the conclusions. The optimal policies are easy to be operated for any relevant investor.

• Knowledge Management Research
• /
• v.17 no.1
• /
• pp.49-72
• /
• 2016

Extant research on firm innovation productivity is limited in measuring the innovation productivity, in which they measured firm innovation productivity by using either inputs or outputs of innovation. The present study complemented the extant research by employing Data Envelopment Analysis (DEA) approach to measure firm innovation productivity. Furthermore, this paper examined the effects of firms' external knowledge search, as one of open innovation practices, on firm innovation productivity, for open innovation activities are regarded as an influencing factor on firm innovation productivity in the previous literatures. Using the data of the Korean Innovation Survey (KIS) of manufacturing industries conducted in 2008, this study developed hypotheses in which we considered not only two dimensions of external knowledge search (breadth and depth) but also two subtypes of external knowledge search (market-driven and science-driven). The results found that searching deeply and market-driven search are positively related to firm innovation productivity, but science-driven search is somewhat negatively related to firm innovation productivity. Furthermore, market-driven search can mitigate the negative effect of science-driven search on innovation productivity.

• The Journal of Asian Finance, Economics and Business
• /
• v.7 no.11
• /
• pp.727-736
• /
• 2020

The purpose of this paper is to examine the relationship power distribution among several blockholders (contestability) and firm performance. We use a sample of 646 firms listed in the security markets of Korea from 2005 to 2007. Using different measures of contestability, we verify advance research literature by examining that, when power dispersion among several blockholders (contestability) increases, firm performance is enhanced. The results show that, when the possibility of a controlling coalition being formed among several blocks increases, the corporate value decreases. We also find that this relationship is even more significant in KOSDAQ. However, the smaller the competition of voting rights among blockholders, the higher the corporate performance in KOSPI. The reason for this seems to be that the two markets are different in terms of ownership and governance. This suggests that the effects of contestability among blockholders on firm performance depend on the type of the stock market. The results of this study expand the existing governance literature by analyzing the relationship between contestability among blockholders and firm performance in emerging markets such as Korea. Our findings contribute to policymakers and investors who are interested in the relationship between contestability of control and firm performance in the Korea stock market.

• Journal of Korea Technology Innovation Society
• /
• v.7 no.3
• /
• pp.607-640
• /
• 2004

This article analyzes the venture firm based upon the new framework of Dynamic Firm Capability (DFC) to identify the process mechanism. Research methodology includes the case study involving structured interview and data collection from two leading Korean ICT(Information Communication Technology) firms in the same sector (DVR). IDIS, spun off from the university, has accumulated the innovative capability based on the R&D department. On the other hand, KODICOM has retained the technological trajectory in terms of marketing competence. Underlying hypothesis is that a firm should show a idiosyncratic evolutionary pattern by acquiring different complimentary assets(CA). In addition, effective internal process should be matched with the essential characteristics not only at the firm level but also at the sectoral level. By analyzing those two different firms, we will find the strategic successful factors based upon the evolutionary point of view. It is a key contribution of this paper to study on the process mechanism of ventures, and to explain detailed process mechanism by viewing two different characteristics of the firm at the functional level.

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

• Journal of Technology Innovation
• /
• v.18 no.1
• /
• pp.1-20
• /
• 2010

Firm’s social network has been known as an important firm strategy because it could promote technological innovation and also minimize economic uncertainty. In this study, we identify four types of firm’s social network activities such as Collaboration, Manufacturing/Marketing/Distribution Agreements, Financing, and M&A, and analyze how these activities affect firm performance using U.S biotechnology firm data. We found that Manufacturing/Marketing/Distribution Agreements increased firm performance in short-run. Also, collaboration with pharmaceutical and biotechnology firms had a positive effect on firm performance, too. However, collaboration with public institutes or universities had a negative effect on firm performance in short run, which implies its collaboration would be mainly focused on research in pure science area. These empirical results provide two policy implications. First, social network strategy should be encouraged in the Korean biotechnology industry. Secondly, governments should consider developing polices that support collaboration of biotechnology with public institutes or universities, to promote technological innovation.

• Journal of Digital Convergence
• /
• v.12 no.3
• /
• pp.177-187
• /
• 2014

We investigate the association between tax strategy and investment efficiency focusing on manager's investment decision. Specifically, we examine the effect of manager's tax avoidance on the firm's investment level. The result show that as the degree of tax avoidance becomes higher firm's over investment increases. This result implies that the available resources generated from firm's tax avoidance induces over investment. Prior researches have been interested in the effects of firm's tax strategy on firm value. However, there is little literatures regarding the effects of firm's tax strategy on management's real investment decisions which provides the important implications about the mechanisms between tax strategy and firm value. In this respect, our research provides a meaningful results which demonstrates the effects of firm's tax strategy on manager's real investment decisions. This will provide useful implications for the investors and government regarding manager's tax avoidance behavior.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
• /
• v.9 no.3
• /
• pp.13-22
• /
• 2014

This article investigates the effects of prior firm founding experience, prior firm's performance, same industry matters, entrepreneurship communities or educations on subsequent firm performance. This study also explores whether same industry matters and entrepreneurship communities or educations have interaction effects between entrepreneurial experience and subsequent firm performance. The results show that prior firm founding experience and prior firm's performance have a positive effect on subsequent firm performance. The rest of variables have no significant direct effects on firm performance. However, same industry matters and entrepreneurship communities or educations have interaction effects of entrepreneurial experience on firm performance. Based on results of this empirical study, this study draws some implications that entrepreneurs can become serial entrepreneurs and experience entrepreneurial success.

• Journal of the Korea Academia-Industrial cooperation Society
• /
• v.22 no.4
• /
• pp.563-569
• /
• 2021

This is a study on the relationships between foreign ownership and the firm value of Korean-listed ICT companies in the KOSDAQ market. The data based on 752 firm-year observations during the sample period from 2001 to 2018 was utilized to analyze the impact of foreign ownership in terms of the firm value. As a result of this analysis, more foreign ownership has positive effects on the firm value. An analysis of the effects of the interaction between foreign ownership and the debt ratio on the firm's value found that the interaction between foreign ownership and debt ratio had a positive effect on the firm's value. On the other hand, this interaction effect was less significant than the relationship between foreign ownership and the firm value. This is because foreign investors are already performing the role of monitoring and disciplining the use of debt to some extent. Therefore, the interaction effect was relatively small.