• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.6
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• pp.11-26
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• 2023

This study aimed to empirically analyze the effect of Korean companies' FDI(Foreign Direct Investment) on their financial performances, particularly divided into profitability, stability, growth and activity, while comparing distinct financial performances between SMEs(small and medium-sized enterprises) and large enterprises whose corporate attributes are different from each other. As research subjects, this study selected FDI Korean companies from the directory of oversea-expanded companies of KOTRA(Korea Trade-Investment Promotion Agency) and used financial data from a total of 409 companies(136 SMEs and 273 large enterprises) with complete financial data for the first five years after the initial investment out of all the financial data from 1990 to 2021. The analysis results can be summarized as follows; In the profitability sector, FDI had positive effects on ROA(Return on Assets) and ROS(Return on Sales) of SMEs, while having negative effects on those of large enterprises to the contrary. In the stability sector, FDI had no statistical significance for SMEs, while having significantly negative effect on LEV(Debt to Equity Ratio) of large enterprises. In the growth sector, FDI had significantly negative effect on AGR(Asset Growth) of SMEs, but showed no significant results for large enterprises. In the activity sector, FDI showed no statistical significance for SMEs, while having positive effects on ATR(Asset Turnover Ratio) and FATA(Fixed Asset Turnover Ratio) of large enterprises. In conclusion, it was found that when having made FDI, SMEs and large enterprises showed different financial performances from each other in terms of profitability, stability, growth and activity.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.909-917
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• 2020

The research aims to analyze the firm-specific and macroeconomic factors that affect insurance company's financial performance. The research explores the variables that influence the financial performance of the United Arab Emirates (UAE)' insurance companies. The analysis for determining financial performance considers the following variables: the firm's age, retention ratio, capital adequacy, underwriting risk/loss ratio, financial-leverage, reinsurance dependency, and macro-economic factors such as GDP per capita, inflation rate considered as independent factors. The return-on-asset (ROA) is the key measuring indicator; it is regarded as the dependent variable for financial performance measures. The research focuses on secondary information obtained from insurance companies' financial statements. The researcher targeted 18 insurance companies listed on the UAE stock exchanges for study purposes. The research examines the overall factors that influence the financial performance of an insurance company. For analysis of data, software package of social sciences (SPSS version 20) is used. The studies used correlation and multiple linear regression analysis to determine financial performance and their effects. The analysis suggests that there are important and constructive relationships between the size, capital adequacy, and reinsurance dependency, while loss ratio, retention ratio, and financial leverage indicate a major negative relationship. And there's no link between GDP per capita and inflation.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.863-867
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• 2020

This study was conducted on financial data of 38 economic groups listed on Vietnam's stock market for the period 2009 - 2019 and it aims to provide an empirical evidence on the impact of working capital management policy on performance in all phases of the economic cycle of Vietnamese economic groups. The study uses FGLS estimation method with 2 dependent variables ROA, GOP, independent variables including INV, AR, AP, CCC, dummy variable representing different phases of the economic cycle, variables Control includes CAT, CR, LEV, SZ, GR. Research shows that the greater the level of investment by companies in liquid assets corresponding to a certain level of activity (shown by average days of inventory (INV), average days of collection. (AR), cash flow cycle (CCC)) the lower the rate of return on assets. The study also provides additional evidence of the negative effects of economic crisis on the performance of economic groups. The study also shows that the number of short-term asset cycles has a positive impact on operational efficiency, and the level of debt use has a negative impact on operational efficiency. This result implies that the managers of economic groups can increase the efficiency of businesses through a reasonable working capital policy.

• Journal of Korean Institute of Industrial Engineers
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• v.41 no.3
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• pp.287-295
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• 2015

Due to the latest agreement between the military authorities of the Republic of Korea (ROK) and the United States (US) of America, Korea's annual contribution to the budget of the United States Forces Korea (USFK) rose as high as close to 1 trillion won. This seemingly prohibitive amount has led to the questioning of military critics regarding determination criteria, wholesomeness of cost, alignment of incentives, and implementational transparency, etc. As these sources of mistrust can potentially undermine the congruence of alliance, we attempt to devise a scientific means to test the validity of Korea's budget contribution. Specifically, we use the real options approach (ROA) to estimating the interval of the fair prices of maintaining the USFK. We consider the USFK as an insurance against foreign incursions, and this enables us to assume their role as a put option. Upon a hypothetical war breakout, the daily cumulative size of the Korean economy is estimated by implementing the simulated loss ratios of assets and population. As a result, the strategic value (put premium) of the USFK is exponentially higher the sooner the US forces are augmented following an intrusion. Also, Korea's payments toward the USFK in 2011 and 2012 appear theoretically fairly valued.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.3
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• pp.115-125
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• 2020

This paper investigates the impact of working capital management on the firm's profitability. The research sample includes 119 non-financial listed companies on Vietnam stock market over a period of 9 years from 2010 to 2018. Two statistical approaches include Ordinary least squares (OLS) and fixed effects model (FEM) are employed to address econometric issues and to improve the accuracy of the regression coefficients. The empirical results show the negative and significant impacts of the working capital management, which measured by cash conversion cycle (CCC) and three components of the CCC including accounts receivable turnover in days (ARD), inventory turnover in days (INVD), and accounts payable turnover in days (APD) on the firm's profitability measured by return on assets (ROA) and Tobin's Q. It implies that firms can increase profitability by keeping the optimization of the working capital management measured by the CCC, which includes shortening the time to collect money from clients, accelerating inventory flow and hold the low payment time to creditors. Besides, the profitability of firms was impacted by the sale growth rate, firm size, leverage, and age. Therefore, this paper provides a new insight to managers on how to improve the firm's profitability with working capital management.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.3
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• pp.41-51
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• 2020

A series of corporate failures and financial crises have raised attention to organizational governance issues, especially for financial institutions. In the banking system, corporate governance further plays a unique role because of the uniqueness of the banking organizations. Therefore, this study aims to examine the effect of corporate governance disclosure on bank performance by building a corporate governance disclosure index (CGDI) for 10 Islamic banks operating in Iran, Saudi Arabia and Malaysia. The data used in this study are secondary data taken from annual reports and sourced from the official websites of each banks include Iran Exchange, Stock Market Quotes and Financial News, and Bursa Malaysia. This study uses content analysis of the annual bank report within five years (2014-2018). The results show that Islamic banks comply with 72.4% of the attributes discussed in the CGDI. The most frequently reported and disclosed elements are board structure and audit committee. The regression results provide evidence that Islamic banks with a higher level of corporate governance disclosure reported high operating performance measured by ROA. In contrast to the expectation, the financial performance of ROE and Tobins'q are not significantly related to the disclosure of sharia bank governance.

• Journal of Distribution Science
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• v.17 no.7
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• pp.45-53
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• 2019

Purpose - The relationship between multinationality and performance has become a hot topic in academic circles and is very important for multinational firms, especially for Chinese multinational firms, who need more experience to enter the international market. Given this background, this paper attempts to figure out the importance of multinationality to China's firm performance and to explore whether the Four-stage Theory can also be applied to China's firms. Research design, data, and methodology - We employ the panel data of 435 multinational firms from 2008 to 2017 chosen from China's A-shares to conduct an empirical analysis by using a fixed-effects model. In the paper, the performance is represented by ROA (return on assets), treated as a dependent variable, and multinationality is represented by FSTS (foreign sales/total sales), treated as an independent variable. Results - We find that the performance first decreases then rises, then falls down, and rises again in the end. Hence there is a W-shaped relationship between the multinationality of the Chinese manufacturing industries and firm performance, proving that the four-stage theory is also applicable to Chinese multinational firms. Conclusions - These empirical results can provide some advice for policymakers to improve the firm performance such as reducing the logistics cost of multinationality.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.4
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• pp.65-74
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• 2019

This study has two main purposes; first, it examines the effect of capital structure on profitability of Islamic and conventional banks; second, it determines that whether the capital structure of Islamic and conventional banks is same or not. A sample of ten banks was taken over the period 2006-2016. Independent samples T-test was used for finding the comparison between the capital structure of Islamic and conventional banks while for assessing the impact of capital structure on profitability, regression analysis (Fixed effects model) was used. Results showed that the capital structure of both types of banks was similar except for bank size which differed significantly. Moreover, ROA was negatively correlated to the capital structure of both conventional and Islamic banks. In contrast, ROE was positively correlated to the capital structure of both conventional and Islamic banks. In addition to that, two explanatory variables were positively correlated while two were negatively correlated to EPS for both Islamic and conventional banks. This study proves the existence of prominent theories of capital structure (pecking order theory and trade-off theory) for both conventional and Islamic banks in Pakistan and also validates the economies of scale.

• Journal of Information Technology Services
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• v.15 no.2
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• pp.51-63
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• 2016

In this study, we conducted a comparative analysis of R&D investment efficiency and operational efficiency of IT firms using Data Envelopment Analysis (DEA). We categorized thirteen sample firms into two groups-IT manufacturing and IT service-after an extensive literature review on IT industry classification. We adopted an output-oriented two-stage DEA model suggested by Banker et al. (1984) with total asset and R&D investment as input variables. Then, we constructed investment efficiency and operational efficiency by using Return on Equity (ROE) and Return on Asset (ROA) as intervening variables and operating income and Earnings Per Share (EPS) as output variables. The outcome of the analysis is summarized as follows. First of all, IT manufacturing firms were more efficient (57% on average) than IT service firms. To be specific, IT service firms showed decreasing returns to scale (DRS) with diseconomy of scale. In contrast, IT service firms showed higher operational efficiency (81.5% on average) than IT manufacturing firms. Also, we conducted a Mann-Whitney U test to compare the output of IT service firms and IT manufacturing firms. Lastly, we found a negative correlation ($R^2$ = -.754) between R&D investment efficiency and operational efficiency which infers the trade-off between two constructs

• Journal of Navigation and Port Research
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• v.39 no.2
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• pp.115-123
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• 2015

This study focused on the alternative to estimate the demand of employment in Kenya logistics. First of all, it investigated the importance and necessity of search about the present circumstance of the country's industry. Next, it reviewed respectively the concept and limitation of several previous models for employment, including Bureau of Labor Statistics, USA; ROA, Netherlands; IER (Institute for Employment Research), UK; and IAB, Germany. In regard to the demand forecasting of employers in logistics, it could anticipate more realistically the future demand by the time-lag approach. According to the findings, if value of output record 733,080 KSH million in 2015 and 970,640 in 2020, compared to 655,222 in 2013, demand on wage employment in logistics industry would be reached up to 95,860 in 2015 and 104,329 in 2020, compared to about 89,600 in 2012. To conclude, this study showed the more rational numbers about the demand forecasting of employment than the previous researches and displayed the systematic approach to estimate industry manpower in logistics.