• 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.

• The Journal of The Korea Institute of Intelligent Transport Systems
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• v.17 no.1
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• pp.55-70
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• 2018

Recently, as shared transportation services has expanded, integrated mobility services that link personal transportation and public transportation are paid attention. To do this, it is necessary to analyze trip mode chaining behavior. This study analyzed the characteristics of the trip mode chaining behavior using the 2010 travel diary survey in Seoul, and analyzed factors to affect mode choice of trip chaining through the multinomial logit model. The transportation means were classified into passenger cars, city buses, intercity buses, railways, taxis, and others, and 25 trip mode chaining types were identified. Among them, the trip share connected between city bus and railways was the highest. It was also found that the trip mode chaining occurred mainly at commuting and in the morning and afternoon peak. According to the model results, the mode choice of trip chaining is significantly influenced by individual attributes (sex and age), household attributes (car ownership and income), trip attributes (trip purpose, trip time and trip length), and arrival area attributes (number of subway lines and bus lines, ratio of commercial area, land use mix and central region).

• Journal of East Asia Management
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• v.1 no.1
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• pp.1-27
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• 2020

Military experience has a great impact on a soldier ability to handle risks. Therefore, when those soldiers become managers, they may behave differently in making risky corporate decisions, especially in activities like the R&D investment. However, studies on how military experience affect R&D have been largely missing in the largest emerging economy, i.e. China, despite that the country hires a higher percentage of military managers than the US. In addition, it remains a question whether military managers affect the state-owned enterprises (SOEs) in China, as many of the corporate decisions are made by the government. This paper tries to address these questions. The imprinting theory and the upper echelon theory suggest that managers' personal experience can affect their behaviour, which in turn influences their corporate decisions. In this paper, we examine whether managers with military experience lead to higher R&D investment and whether such an effect exists in state-owned enterprises. Based on a sample of listed firms in China's A-share market over 2008-2017, we make two findings. First, companies with military managers have high R&D investment. By dividing managers' military positions into high and low rank, we find that companies tend to have higher (lower) R&D investment if their managers hold a high-rank (low-rank) position. Second, the effect of high-rank military managers on R&D investment is more pronounced if the manager is also the founder and the company is a non-state-owned enterprise. For low-ranking military managers, a stronger effect on R&D investment is also observed if they are also the founder, but whether their companies are state-owned or not has no impact on R&D investment. This study identifies managers' military experience as a contributing factors to corporate R&D investment in the largest emerging economy. This paper tests an implication of the imprinting theory and the upper echelon theory, i.e., managers' personal experience can affect their behaviour, which in turn influences their corporate decisions. Specifically, we focus on one aspect of personal experience - military experience - and look at whether it is beneficial to firms' technological innovation, therefore enriches the literature of managerial heterogeneity. Our findings on the influence of managers' military experience on firms' technological innovation can help us better understand the role of managers play in corporate decision making, and how managers' individual traits interact with the firm's characteristics.

• Journal of the Korean Institute of Traditional Landscape Architecture
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• v.38 no.1
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• pp.67-76
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• 2020

This study aims to elicit criteria regarding reassessment and designation of linear scenic sites henceforth. The results are as follows; First, based on the documents from the Cultural Properties Protection Committee of Korea, 23 out of 113 scenic sites in Korea were drawn, and their linear characteristics were categorized into four types including valleys, paths, rivers, and ridges. The linear scenic sites provide certain features in terms of sequence and direction, which results in the similar utilization among the sites which share the linear similarity. Second, the 23 sites mentioned above were intensely examined on the basis of six criteria for linear scenic sites through FGI, focus group interview. The criteria consist of six elements involving core resource(12), lot number(8), unclear(8), management path(5), ridge(4), basin(3). Third, the Cultural Heritage Administration has prioritized core resource since 2010, when designating a scenic site, whereas it tended to consider lot number as priority prior to 2010. It is thought that the authority gave consideration to issues related to private ownership of property in the scenic sites and the purpose of designation. Fourth, scenic sites are generally designated in accordance with the boundary of core resource, and in most cases, there are buffer zones alongside the core resource.

• Korean journal of communication and information
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• v.33
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• pp.227-251
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• 2006

The Law Ensuring the Freedom and the Functions of Liability of the Newspapers ("The Newspaper Law") which was passed in the National Assembly on January 1, 2005 is considered as a tremendous setback compared to "the Newspaper Bill" of civil press organizations. Of the two instruments to ensure the editorial freedom, the regulation on the newspaper company ownership share distribution was eliminated and the editorial committee (editorial codes of ethics) became an arbitrary system. That is, the Newspaper Law was criticized as a law of "half-success." However, the Newspaper Law has its own benefit by institutionalizing the establishment of the Korea Commission for the Press, the Press Fund, and the Korea Newspaper Circulation Service for Promoting Newspaper Businesses and by strengthening the criteria to estimate market dominant businesspeople in newspaper market than general markets to ensure the diversity of public opinions. As the Newspaper Law was promulgated, Donga-Ilbo and Chosun-Ilbo submitted the Constitutional Petition against "the Newspaper Law" and the Constitutional Court is expected to give the decision soon. Based on the "Supplements on the Grounds of the Constitutional Petition against the Newspaper Law" ("the Petition"), this paper will examine the main issues of the debates over the Constitutionality of the Newspaper Law.

• Korean Business Review
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• v.11
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• pp.217-239
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• 1998

The intial public offerings(IPO) issued by going public must be decided duly and seriously. In these sense, this paper reviewed and analysed synthetically the theories and the empirical studies on the IPO. The implications about the empirical studies on the IPO in korea stock exchanges(KSE) are as follows: First, evaluating the IPO's intrinsic value, the issued firm's characteristics(style, scale, age, reevaluation and goodwill etc.) and business environments(industry, economic states, regulations and the relation with government etc.) will be considered. Evaluating the IPO's relative value, the stock price of firms registered in KOSDAQ market will be appreciated. Second, the income smoothing of an IPO listed in KSE accrued in the first and second years. Accordingly if auditors audit the accounting reports of firms to list in KSE by going public, they should more concern to the income smoothing on the accounting reports. Third, the information accuracy of investment banks and the qualities of auditors negatively correlated with the underpricing of an IPO. It is need to promote the information accuracy of investment banks and the qualities of auditors. Regulatory organizations support to promote the information accuracy of investment banks and the qualities of auditors. Forth, the investors interested in the IPO are to recognize the follows. (1) Relations between the underpricing of an IPO and the ratio of public participation, the issue price, the offer size, the insider ownership, the net asset value per share, the price decision system of an IPO. (2) An entrepreneurs who decided to bring his firm public would like to issue the IPO when company's operating conditions are good.

• Korea Real Estate Review
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• v.28 no.2
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• pp.35-47
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• 2018

Securing a stable residential location is one of the most important decisions that must be made in the modern society. On this matter, both individuals and their families must decide on where to live after taking into consideration various analyses. Contributing attributes in the selection of our dwelling place are crucial. In this research, influencing variables were derived from the intention to move by focusing on the characteristics of the household and traffic conditions, while implications were suggested through a comparison of urban characteristics. Suwon was selected as the case study. The result of the analysis showed the city of Suwon has longer communal satisfaction, relies on self-sufficiency, and is conscious of parking regulation. Preferences for rental housing, having infants and elementary school kids, high savings, and commuter convenience in Suwon and Gyeonggi-do ranked higher in the hierarchy of the intention to move. Compared to Gyeonggi-do, Suwon was influenced by commuters in the city and parking regulation-related variables. Meanwhile, Gyeonggi-do was affected by the lack of public transportation facilities and traffic congestion. Suwon, on the other hand, has a high share of passenger car ownership, so it seems that the psychological stability of parking space is significant. This research will contribute in the policy-making of Suwon, especially on the subject of migration prediction of citizens and real estate location selection, through analyses of variables related to the intention to move to a new residence.

• The Journal of Society for e-Business Studies
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• v.24 no.3
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• pp.73-86
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• 2019

After the 4th industrial revolution, the healthcare industry is striving to find new business models through new technologies. Among them, blockchain technology is one of the technologies that have great interest in the healthcare industry. Most providers of personal health record systems have difficulty in securing marketability due to various problems. Therefore, they try to integrate blockchain technology to develop new systems and gain marketability. However, blockchain has limitations in solving the problems of the personal health record system. In this study, we have designed a personalized health data management framework that enables information subjects to acquire full ownership rights of individual's health data, based on distributed ledger technology. For the framework design, we refer to the structure of R3 Corda. It was designed with a different network structure than the existing blockchain systems so that the node can be operated on the personal user's mobile device. This allows information subjects to directly store and manage their own data and share data with authorized network members. Through the proposed system, the information utilization of the healthcare industry can be improved and the public health promotion and medical technology development can be realized.

• International Area Studies Review
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• v.21 no.1
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• pp.25-57
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• 2017

In this study, we analyzed the information asymmetry and the agency problem in major affiliated companies on the basis of the R&D investment. As a result of comparing how the R&D investment effects on major affiliated companies and the independent companies, even the achievement of R&D investment effects in a positive way to the firm value, the positive effect appears much lower on major affiliated companies comparing independent companies. In order to analyze the case, we investigated in a separate way according to the shareholding ratio and the affiliated market using the sample of the independent company and the group affiliated company. As a result of such analysis, the cause of this comes from the agency problem in major affiliated company, not the asymmetry information of affiliated company. After we analyzed the sample of the research depending on the affiliation market, we could observe there is a little impact of the asymmetry information in the outcome of the R&D investment of the major affiliated companies. In contrast, the companies which rated lower in the ratio of the shareholding appears much less in the positive effect of R&D investment compared to the companies which rated at a higher level. This phenomenon was also consistently observed when changing the research method or further subdividing the sample of companies belonging to the group based on the ownership share of major shareholders.

• Knowledge Management Research
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• v.21 no.3
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• pp.45-65
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• 2020

It is desirable to invest in wine that increases its value, but wine investment itself is unfamiliar in Korea. Also, the process itself is unreasonable, and information is often forged, because pricing in the wine market is done by a small number of people. With the right solution, however, the wine market can be a desirable investment destination in that the longer one invests, the higher one can expect. Also, it is expected that the domestic wine consumption market will expand through the steady increase in domestic wine imports. This study presents the consortium block chain framework for revitalizing the wine market and enhancing transparency as the "right solution" of the nation's wine investment market. Blockchain governance can compensate for the shortcomings of the wine market because it guarantees desirable decision-making rights and accountability. Because the data stored in the block chain can be checked by consumers, it reduces the likelihood of counterfeit wine appearing and complements the process of unreasonably priced. In addition, digitization of assets resolves low cash liquidity and saves money and time throughout the supply chain through smart contracts, lowering entry barriers to wine investment. In particular, if the governance of the block chain is composed of 'chateau-distributor-investor' through consortium blockchains, it can create a desirable wine market. The production process is stored in the block chain to secure production costs, set a reasonable launch price, and efficiently operate the distribution system by storing the distribution process in the block chain, and forecast the amount of orders for futures trading. Finally, investors make rational decisions by viewing all of these data. The study presented a new perspective on alternative investment in that ownership can be treated like a share. We also look forward to the simplification of food import procedures and the formation of trust within the wine industry by presenting a framework for wine-owned sales. In future studies, we would like to expand the framework to study the areas to be applied.