• Journal of Agricultural Extension & Community Development
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• v.21 no.2
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• pp.1-28
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• 2014

Private consulting firms that are currently participating in rural area development projects with a bottom-up approach are involved in nearly all areas of rural area development, and the policy environment that emphasizes the bottom-up approach will further expand their participation. Reviews of private consulting firms, which started out with high expectations in the beginning, are now becoming rather negative. Expertise is the key issue in the controversy over private consulting firms, and the analysis tends to limit the causes of the problems within firms. This study was conducted on the premise that the fixation on cause and structure results in policy issues in the promotion process. That is because the government authorities are responsible for managing and supervising the implementation of policies, not developing the policies. The current issues with consulting firms emerged because of the hasty implementation of private consulting through the government policy trend without sufficient consideration, as well as the policy environment that demanded short-term outcomes even though the purpose of bottom-up rural area development lies in the ideology of endogenous development focused on the changes in residents' perceptions. Research was conducted to determine how the problems of private consulting firms that emerged and were addressed in this context influenced the consulting market, using current data and based on the firms' business performance. In analyzing the types, firms were divided into three groups: top performers including market leaders (9), excellent performers (36), and average performers (34). An analysis of the correlation between the business performance of each type and managerial resources such as each firm's expertise revealed that there was only a correlation between human resources and regional development in excellent performers, and none was found with the other types. These results imply that external factors other than a firm's capabilities (e.g., expertise) play a significant role in the standards of selecting private consulting firms. Thus, government authorities must reflect on their error of hastily adopting private consulting firms without sufficient consideration and must urgently establish response measures.

• KDI Journal of Economic Policy
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• v.12 no.2
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• pp.95-120
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• 1990

The underpricing of new shares of a firm that are offered to the public for the first time (initial offerings) is well known and has puzzled financial economists for a long time since it seems at odds with the optimal behavior of the owners of issuing firms. Past attempts by financial economists to explain this phenomenon have not been successful in the sense that the explanations given by them are either inconsistent with the equilibrium theory or implausible. Approaches by such authors as Welch or Allen and Faulhaber are no exceptions. In this paper, we develop a signalling model of capital investment to explain the underpricing phenomenon and also analyze the efficiency of investment. The model focuses on the information asymmetry between the owners of issuing firms and general investors. We consider a firm that has been owned and operated by a single owner and that has a profitable project but has no capital to develop it. The profit from the project depends on the capital invested in the project as well as a profitability parameter. The model also assumes that the financial market is represented by a single investor who maximizes the expected wealth. The owner has superior information as to the value of the firm to investors in the sense that it knows the true value of the parameter while investors have only a probability distribution about the parameter. The owner offers the representative investor a fraction of the ownership of the firm in return for a certain amount of investment in the firm. This offer condition is equivalent to the usual offer condition consisting of the number of issues to sell and the unit price of a share. Thus, the model is a signalling game. Using Kreps' criterion as the solution concept, we obtained an essentially unique separating equilibrium offer condition. Analysis of this separating equilibrium shows that the owner of the firm with high profitability chooses an offer condition that raises an amount of capital that is short of the amount that maximizes the potential profit from the project. It also reveals that the fraction of the ownership of the firm that the representative investor receives from the owner of the highly profitable firm in return for its investment has a value that exceeds the investment. In other words, the initial offering in the model is underpriced when the profitability of the firm is high. The source of underpricing and underinvestment is the signalling activity by the owner of the highly profitable firm who attempts to convince investors that his firm has a highly profitable project by choosing an offer condition that cannot be imitated by the owner of a firm with low profitability. Thus, we obtained two main results. First, underpricing is a result of a signalling activity by the owner of a firm with high profitability when there exists information asymmetry between the owner of the issuing firm and investors. Second, such information asymmetry also leads to underinvestment in a highly profitable project. Those results clearly show the underpricing entails underinvestment and that information asymmetry leads to a social cost as well as a private cost. The above results are quite general in the sense that they are based upon a neoclassical profit function and full rationality of economic agents. We believe that the results of this paper can be used as a basis for further research on the capital investment process. For instance, one can view the results of this paper as a subgame equilibrium in a larger game in which a firm chooses among diverse ways to raise capital. In addition, the method used in this paper can be used in analyzing a wide range of problems arising from information asymmetry that the Korean financial market faces.

• Journal of Technology Innovation
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• v.17 no.1
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• pp.1-48
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• 2009

Recently we have found some symptoms that R&D fiscal incentives might not work well what it has intended through the analysis of current statistics of firm's R&D data. Firstly, we found that the growth rate of R&D investment in private sector during the recent decade has been slowdown. The average of growth rate (real value) of R&D investment is 7.1% from 1998 to 2005, while it was 13.9% from 1980 to 1997. Secondly, the relative share of R&D investment of SME has been decreased to 21%('05) from 29%('01), even though the tax credit for SME has been more beneficial than large size firm, Thirdly, The R&D expenditure of large size firms (besides 3 leading firms) has not been increased since late of 1990s. We need to find some evidence whether fiscal incentives are effective in increasing firm's R&D investment. To analyse econometric model we use firm level unbalanced panel data for 4 years (from 2002 to 2005) derived from MOST database compiled from the annual survey, "Report on the Survey of Research and Development in Science and Technology". Also we use fixed effect model (Hausman test results accept fixed effect model with 1% of significant level) and estimate the model for all firms, large firms and SME respectively. We have following results from the analysis of econometric model. For large firm: i ) R&D investment responds elastically (1.20) to sales volume. ii) government R&D subsidy induces R&D investment (0.03) not so effectively. iii) Tax price elasticity is almost unity (-0.99). iv) For large firm tax incentive is more effective than R&D subsidy For SME: i ) Sales volume increase R&D investment of SME (0.043) not so effectively. ii ) government R&D subsidy is crowding out R&D investment of SME not seriously (-0.0079) iii) Tax price elasticity is very inelastic (-0.054) To compare with other studies, Koga(2003) has a similar result of tax price elasticity for Japanese firm (-1.0036), Hall((l992) has a unit tax price elasticity, Bloom et al. (2002) has $-0.354{\sim}-0.124$ in the short run. From the results of our analysis we recommend that government R&D subsidy has to focus on such an areas like basic research and public sector (defense, energy, health etc.) not overlapped private R&D sector. For SME government has to focus on establishing R&D infrastructure. To promote tax incentive policy, we need to strengthen the tax incentive scheme for large size firm's R&D investment. We recommend tax credit for large size film be extended to total volume of R&D investment.

• Proceedings of the Korea Contents Association Conference
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• 2006.05a
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• pp.317-321
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• 2006

Endless criminal act has serious effect on safety of the nation and lives of the citizens and it is causing major disorder in ruling of the nation and the society. Also internet generalization in public put country's information foundation on the latest trend on the other hand, due to lack of security concept, cyber crime is on the rise such as hacking and viruses. But with various crime occurrence and increased desire for safety of citizens, there is limit to provide high quality public security service with just police force and equipments. To solve the problems, advanced crime prevention system, not on the nation's level but on the private level was activated private security business some time ago. And now it has its firm place as a corresponding existence with crime prevention capability of police force. Still private security industry of Korea has relatively many weak points when compared with advanced countries and it should be backed up with improvement of the law and the system.

• Journal of Arbitration Studies
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• v.13 no.2
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• pp.613-630
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• 2004

Conciliation is one of the most effective ADR(alternative dispute resolution) which takes the place of civil procedure. It is achieved with disputants' independent will. The disputants negotiate each other, and make peaceful settlement. If a compromise is effected between the two, it regards the compromise as a judgement of the Supreme Court. This effect on the conciliation is afford a basis for the private autonomies. But nowadays, the practical use of the private autonomies is not thoroughgoing enough in our country. It is a matter of no uncommon occurrence for the member of a conciliation commission to form a conclusion about the dispute and to persuade the disputants to accept the conclusion. Even the judges have a tendency to conduct a conciliation like civil procedure. Under these circumstances, it's harsh to the disputants that a compromise in the conciliation has an effect like the judgement of the Supreme Court. So you should reconsider carefully the role or service of a conciliation commission. The role of a conciliation commission must be to guarantee an atmosphere of freedom, and for disputants to negotiate without restraint. So the members of a conciliation commission should make an offer the disputants the information on the members and proceedings of the conciliation. It will make the disputants have a firm belief that the members are fair and conciliation will be progressed in a fair. Moreover they have to notify the disputants of the estimated norms which is concerned in the dispute, too. It will facilitate the negotiation and compromise, and will justify claim preclusion(res judicata) which is based on Korean Civil Conciliation Law(Article 29) says that conciliation has the full force and effect of a civil judgement of the Supreme Court.

• Journal of Digital Convergence
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• v.11 no.4
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• pp.177-188
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• 2013

This study examines how managerial ownership structure affects the borrower's choice of private versus public debt using 2,608 firm-year data for 2006-2008. This paper investigates the relationship between managerial ownership structure and debt choice. Managerial ownership is measured using number of stocks and unexercised stock-options and debt is classified public and private debt. The results find that there is a positive association between managerial ownership and the private debt dependence and also find that when firms finance additional funds, higher managerial ownership leads managers to choose private debt not public debt. Since private debt can be classified into bank debt and non bank debt, this paper examines the relationship between managerial ownership and a choice of bank debt. The results indicate that managers with higher ownership are more likely to use bank debt over public debt and non bank debt. By examining the relation between managerial ownership and a debt choice, this paper has following contributions. First, this study shows that managerial ownership affects the choice of the source of financing using three different proxies of managerial ownership. Second, this study classified private debt into bank debt and non-bank debt and provide the evidence of preference toward private debt especially bank debt among other financing sources. Finally, there are extensive studies related to capital structure and managerial ownership, but there is little empirical research on the debt choice and managerial ownership. Thus, this paper adds to literature by exploring the effects of managerial ownership on a debt choice.

• Asia pacific journal of information systems
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• v.12 no.4
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• pp.37-53
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• 2002

The three main purposes of this paper are to (1) identify critical success factors(CSF's) for electronic commerce(EC), (2) investigate the explanatory power of these CSF's on firm performance, and (3) compare differences in evaluating CSF's and explaining impact of CSF's on performance between Korean and U.S.A. EC managers. Through a literature review and interviews with managers in EC firms, a list of 16 CSF's consisting of 111 items was compiled. In the second stage, questionnaires were administered to managers of EC companies in Seoul, Korea and Texas, U.S.A. Survey results show that CSF's have very significant explanatory power for firm performance in both Korean and U.S.A. While security, privacy, technical expertise, information about goods/services, and variety of goods/services are the most explanatory CSF's in Korea, evaluation of EC operations, technical expertise, and ease of use show most explanatory power in U.S.A. This analysis confirms the fact that customers use EC if they feel comfortable about navigating EC for information about a variety of goods/services without technical difficulty and in a secure and private way.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.1
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• pp.47-58
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• 2019

The purpose of this paper is to examine the relationship between the nature of controlling shareholders and corporate anti-corruption practice disclosure (ACPD) as well as the mediating role of political background of the chairman or CEO of the firm on the relationship between the two. The content analysis was conducted to extract ACPD from standalone corporate social responsibility reports (CSRR) of 703 China's A-share listed companies. A dummy variable was constructed according to whether a firm disclosed ACPD or not. Logistic regression analysis was used then. Results show that the nature of controlling shareholders has a significant impact on corporate ACPD, with central enterprises disclosing the most frequently, local state-owned enterprises the second and private enterprises the least. Political background of the chairman or CEO has a negative impact on corporate ACPD of state-owned enterprises. These findings have some useful insights in understanding the rent-seeking behavior and information disclosure behavior of corporates in emerging markets. In order to curb the serious corruption problem which is commonplace in developing countries like China, the government should exert certain pressure to strengthen the supervision of information disclosure of listed firms and improve information transparency.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.10
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• pp.1-10
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• 2021

This paper attempts to investigate the determinants of capital structure of Vietnamese firms and also shed light on some of the factors of the modern theory of capital structure which is relevant for explaining the capital structure in advanced countries which are also relevant in the context of Vietnam. Using panel data from more than 1000 Vietnamese listed enterprises census 2017-2020, the paper finds that leverage ratio of Vietnamese firms is significantly related to probability. The firms have high level of fixed assets which they use as collateral, resulting in higher debt ratio, which is in line with the pecking order theory. The result also confirm that highly targeted debt ratio is positively correlated with the industry characteristics (using real estate firms as a benchmark), in which firm operates. Furthermore, consistent with the trade-off hypothesis, the leverage ratio is positively affected by non - debt tax shield. The result confirms that a large number of companies are state - owned, will have an insignificant impact of firm's size (as reverse proxy for bankruptcy cost) on leverage ratio. We also find that there is no distinction between state-owned enterprises and private enterprises due to strict adherence to the rules set by the Vietnamese government. Distinct from other countries, corporate income tax has slight impact on capital structure in Vietnamese firms.

• The Journal of Industrial Distribution & Business
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• v.9 no.7
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• pp.53-59
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• 2018

Purpose - This study examines the effect of control-ownership wedge on stock crash risk. In Korea, controlling shareholders have exclusive control rights compared to their cash flow rights. With increasing disparity, controlling shareholders abuse their power and extract private benefits at the expense of the minority shareholders. Managers who are controlling shareholders of the companies tend not to disclose critical information that would prevent them from pursuing private interests. They accumulate negative information in the firm. When the accumulated bad news crosses a tipping point, it will be suddenly released to the market at once, resulting in an abrupt decline in stock prices. We predict that stock price crash likelihood due to information opaqueness increases as the wedge increases. Research design, data, and methodology - 831 KOSPI-listed firm-year observations are from KisValue database from 2005 to 2011. Control-ownership wedge is measured as the ratio (UCO -UCF)/UCO where UCF(UCO) is the ultimate cash-flow(control) rights of the largest controlling shareholder. Dependent variable CRASH is a dummy variable that equals one if the firm has at least 1 crash week during a year, and zero otherwise. Logistic regression is used to examine the relationship between control-ownership wedge and stock price crash risk. Results - Using a sample of KOSPI-listed firms in KisValue database for the period 2005-2011, we find that stock price crash risk increases as the disparity increases. Specifically, we find that the coefficient of WEDGE is significantly positive, supporting our prediction. The result implies that as controlling shareholders' ownership increases, controlling shareholders tend to withhold bad news. Conclusions - Our results show that agency problems arising from the divergence between control rights and cash flow rights increase the opaqueness of accounting information. Eventually, the accumulated bad news is released all at once, leading to stock price crashes. It could be seen that companies with high control-ownership wedge are likely to experience future stock price crashes. Our study is related to a broader literature that examined the effect of the control-ownership wedge on stock markets. Our findings suggest that the disparity is a meaningful predictor for future stock price crash risk. The results are expected to provide useful implications for firms, regulators, and investors.