• KDI Journal of Economic Policy
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• v.27 no.1
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• pp.81-122
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• 2005

The paper aims to establish the characteristics of the Korean firms' R&D investment and to estimate the private rate of return to R&D investment. For the empirical analysis, a balanced panel data is constructed with 695 firms on 8 year observations. The panel data enables to characterize R&D investment of the Korean firms, which is mostly conformed to the 'stylized facts' of R&D investment that found in the previous studies on foreign firms. Klette model was used to estimate the private rate of return on R&D investment and depreciation rate of R&D capital. The paper estimates that the rate of return on R&D investment is 10.5% on average or 16.4% on median for the whole industry whereas manufacturing firms show 10.4% on average or 16.4% on median. The depreciation rate was estimated about 32.9% for whole industry, where it ranges from the minimum 11.6% for metal industry and 49.5% for services. The median estimate of the rate of return for R&D investment of Korean firms is roughly two times higher than real interest rates for the same period, which implies that R&D investment allows sizable rent in addition to the opportunity cost of capital investment.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.21 no.11
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• pp.804-813
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• 2020

This paper finds that Korean zero-leverage firms are not homogeneous. By conducting both univariate and multivariate logit regression analysis, this paper finds that Korean zero-leverage firms have zero leverage as either a consequence of financial constraints or because of a strategic decision to mitigate under-investment incentives and preserve financial flexibility. There are two distinct groups of unlevered firms with different levels of constraints as measured by their dividend policy, namely dividend payers and non-payers. Importantly, this paper finds new evidence that these two groups have different motives for selecting a zero leverage policy. Firms in the first group (non-payers) have zero leverage, mainly due to financial constraints. They rely heavily on their internal funds and consequently invest in fewer growth opportunities than their levered counterparts. Firms in the second group (payers) deliberately avoid debts and preserve financial flexibility to mitigate investment distortions, as predicted by the under-investment and financial flexibility hypotheses.

• International Commerce and Information Review
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• v.11 no.3
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• pp.311-335
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• 2009

This study investigates the factors barrier the performance of Korean manufacturing firms in China. Also an empirical data use the field survey of Korean manufacturing firms in China. as a result, First, we find that employment-cost factor, that is rising labor costs, a change of occupation is an effect the performance of Korean manufacturing firms in China. Second, business beginning year and by 7 region factor is very significant on the performance of Korean FDI firms in china. And then, Korean corporate investment in China is a desirable form of long-term investment shall be determined. also we know that regions of China, differentiated investment approach is effective. finally, The result shows that FDI to China is need of the long term plan, and In actual use, these FDI should be applied flexibly in china business environment.

• Journal of Korean Society for Quality Management
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• v.18 no.2
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• pp.117-126
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• 1990

The Purpose of this study is to grasp the general effects of measurement-related investment by industrial firms. We presupposed the hypothesis that the measurement-related investment affects the decrease of product inferiority rates and analyzed the investigation results by means of PIMS(Profit Improvement of Market Strategy) model. As the results, we found out that the firms with positive measurement-related investment showed for less inferiority rates of products considerably. This study put an emphasis on the verification results showing that the considerable increase of measurement-related investment decreases the product inferiority rate by the statistical methods.

• Journal of Technology Innovation
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• v.12 no.1
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• pp.1-24
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• 2004

This paper analyses the effects of R＆D investment on patent in Korean manufacturing firms during the period 1984-99. The data contains 140 companies which listed in Korea Stock Exchange(KSE). We observed that the relative shares of R＆D investments and patent applications are much higher in scientific firms than in the other firms. The regression results show that R＆D investment has significantly positive effects on the growth of patent application and registration. And the effects of R＆D on patent turns out to be stronger in scientific firms than the other firms. The firm size and the capital intensity also have an important effect on the propensity to patent.

• KDI Journal of Economic Policy
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• v.37 no.1
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• pp.19-44
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• 2015

This paper examines the effect of the global financial crisis on corporate investment in Korea. Specifically, the crisis was considered to have possibly constrained firm-level investment as the negative shock to the credit supply dramatically unfolded. As Duchin et al. (2010) demonstrated, if a negative supply-side shock is evident during a crisis period, larger cash holdings before the crisis will lead to fewer constraints to corporate investment, or vice versa. In order to investigate the supply-side effect of the crisis, we use firm-level financial data, including firms listed on the Korean stock market as well as small and medium-sized enterprises. We find that corporate investment declined significantly after the crisis, even if we control for factors associated with the demand side, such as contemporaneous capital productivity and cash flow. More importantly, the decline is positively and significantly related to cash holdings before the crisis, implying the negative effect of a credit supply shock. Small and medium enterprises experienced relatively sharp investment declines compared to those of larger firms, and the relationship between pre-crisis cash amounts and the degree of investment decline is greater than that in large firms. Additionally, we examine whether the negative effect persists up to the present, finding evidence that the cash-investment relationship continues in small and medium-sized enterprises.

• International Commerce and Information Review
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• v.10 no.4
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• pp.417-437
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• 2008

Korean firms have had a short history of foreign direct investment and export in China market entry. This present study empirically analyzed determinants of the choice of foreign market entry modes, Particularly forcusing on the China market entry on Korean manufacture firms. This study developed a research model to determinant factor in the China market entry and collected 77 survey responses from the Korean manufacture firms. This study model construct in the third factor, China market character, company character and product character. In China market character, the variance are China trade barrier, culture different, competition power. The variance in company character are internationalization experience, enterprise rage and entry motivation. Also the variance in product character are product different, customer service and cost advantage. It is researcher's main interest that which type of China market entry format brought most positive evaluation form the Korean manufacture firms. therefor, these research results turned out to be different a little both export and direct investment in China market of Korean manufacture firms.

• KDI Journal of Economic Policy
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• v.44 no.1
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• pp.77-98
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• 2022

This paper empirically verifies that the types of capital adjustment costs serve as an important mechanism in relation to investment decision-making after confirming that the investment dispersion of Korean firms is pro-cyclical and can affect business cycles. Specifically, it is found through empirical methods using corporate financial data that capital adjustment costs generally assumed to take a quadratic form in macroeconomics are asymmetric and irreversible in the Korean economy. In particular, capital adjustment costs are empirically proven to cause investment dispersion to expand given that the substitution effect of the marginal value to the marginal cost for one unit of investment in the inter-temporal investment decision is affected by that cost with regard to the resale of owned equipment assets, as opposed to new investments in equipment assets. We ultimately show, albeit indirectly, that investment dispersion can affect business cycles as capital adjustment costs influences investment decisions. What is implied is that the capital adjustment cost is not merely an exogenously deep parameter that fits the dynamics of business cycles in a macroeconomic model but could instead be a policy variable that can be endogenized through government policies.

• Journal of Korea Technology Innovation Society
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• v.20 no.3
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• pp.546-575
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• 2017

This paper investigates the effects of public R&D support on medium-sized firms' R&D investment. The paper collects a panel dataset of Korean manufacturing firms' R&D investment and public support, and employs the DID (difference-in-differences) regression for the test of stimulating or crowding-out effect. Empirical analysis examines how the effect of public R&D support differs between small and medium-sized firms and whether firm size and technological capability moderate the effect in the sample of medium-sized firms. Empirical results show that public R&D support tends to generally stimulate private pure R&D investment for both small and medium-sized firms. Comparing the results for small and medium-sized firms, this paper finds that the stimulating effect is relatively larger and more significant for medium-sized firms, while the effect is not significant for small ones. Furthermore, the paper shows that the stimulating effect of public R&D subsidy on private R&D investment is relatively stronger for medium-sized firms with superior technological competence and the effect of tax support is greater for incompetent firms. These results suggest that public R&D policies and R&D programs, differentiated from those for existing small firms, are necessary for medium-sized firms to stimulate private R&D continuously and formulated carefully by considering firm size, technological capability and growth potential.

• Asia pacific journal of information systems
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• v.9 no.2
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• pp.59-75
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• 1999

Identifying benefit from IT spending is of great concern to most firms in today's competing world. Cost-benefit analysis of IT spending can be conducted when firms have systematic management process of IT spending and the supporting data. This paper examined Korean firm's management process of IT spending, and proposes the best practice. Management process of IT spending and the definition of IT expense and investment were proposed based on the best practice. A proposition that "IT expenses and investments need to be distinguished to manage IT spending effectively' was proposed. Hypotheses were generated and tested with empirical data. Statistical analyses show that ratios of IT investment to IT expense were significantly different during the study period. The results of the study imply that firms can acquire useful information by distinguishing IT expense and investment in the management process of IT spending.