• Journal of Information Technology Services
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• v.11 no.2
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• pp.307-317
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• 2012

We investigate the long-term effect of servitization strategy on firm value. Manufacturing companies recognize servitization as their competitive strategies. While most of existing literature have focused on developing theory, presenting framework, or cases, only a few papers examine effects of servitization strategy empirically. We aims to empirically test the long-term relationship between servitization strategy and firm value. Service ratio and Tobin's q are used to measure the degree of servitization and firm performance, respectively. Data set covers 130 manufacturing companies for 12 years from 1998 to 2009.

• Proceedings of the KAIS Fall Conference
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• 2011.05b
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• pp.792-795
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• 2011

After the year of 2000, compositions of stock holders in domestic firms are rapidly changing. In domestic stock market, the proportion of market value held by foreign investors reaches over 40%. There are several blue chip companies among those where foreign investors hold more than 50% of the stocks. There are still hot debates going on about whether the increase in the number of foreign investors contributes to domestic companies. This research attempted to determine foreign ownership increases enhance firm value empirically. It has been shown that foreign ownership variable has significant positive impact on Tobin's Q of firm value variable. The result suggests that foreign ownership increases in domestic corporations positively contribute to firm value, as they monitor and keep the management transparent as an institutional investor, and they work to soothe agency problems by the managements or the large stock holders.

• Asia pacific journal of information systems
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• v.25 no.1
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• pp.61-81
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• 2015

Investment in research and development (R&D) is critical in the information technology (IT) firms, where newer and better technology is a quintessential goal that directly affects innovation and competitive advantage. This study investigates how R&D investment influences firm performance and value, and how the effect of R&D investment differs between IT hardware and software firms. We also analyze the relationship between firm age and R&D investment in order to identify learning effects on continuous R&D investment. The empirical investigation in this study, based on longitudinal archival data from 2001 to 2010, found a significant effect of R&D investment on firm performance in IT firms. Further, this study demonstrates causal relationship between firm age, and verifies that learning effects are present in R&D investment. Moreover, the results are found to differ between IT hardware and IT software firms.

• Asia Marketing Journal
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• v.20 no.1
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• pp.1-21
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• 2018

An increasing number of studies have examined the effects of corporate social responsibility (CSR) activities on corporate financial performance (CFP) in the service industry. However, the extant literature does not provide comprehensive insights into the conditions on which the CSR-CFP link relies. In this study, firms' marketing communication capability (MCC) is introduced as an important contingency variable, which determines the effects of CSR on the corporate financial performance, in the context of restaurant businesses. Multiple year data on the spending of public restaurant chains on different media are collected, and MCC is subsequently measured using the data envelope analysis. Then, a test is conducted to prove whether MCC moderates the relationship between CSR and firm financial performance. The empirical results support the hypothesis that MCC strengthens the effect of CSR on CFP. Through the findings, this research provides several interesting and important implications to the literature and managers of service firms.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.1241-1248
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• 2021

This study employs data from CRSP/Compustat files for the period from 2003 to 2017 and applies a panel data analysis. The results of this study show a positive relationship between trade credit and the firm's market value, however, the results show a negative relationship if we test the impact of financial credit on the firm's market value. The results have direct policy implications for investors, the firm's management, and financial strategy. An implication of our study is that using trade credit as a source of financing may give a positive signal of the firm's creditworthiness and increase the firm's market value. Also, the results of our study indicate that the benefits of using trade credit may outperform the cost of using it as a source of finance. Prior studies examine the impact of financial leverage on the firm's value, however, this study contributes to the existing studies that examine the factors that affect the firm's market value by examining the impact of using trade credit finance on the firm's market value. The main limitation of this study is that the results are based on listed firms, using data from unlisted firms is not available.

• 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.

• Asia-Pacific Journal of Business
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• v.14 no.1
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• pp.171-194
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• 2023

Purpose - This study starts with the question of whether the capital market is likely to give positive valuations to companies that pursue diversity in their management and corporate governance structure. In this study, minority gender identity is considered as a diversity issue in management that has a socially negative perception. Design/methodology/approach - This study analyzed the relationship between corporate value in the capital market and the policies of companies that advocated minority gender identities, based on listed U.S. company data. Findings - This study finds that companies that support minority gender identities had a lower Tobin's q value than companies that did not. However, in the case of authenticity in terms of corporate governance diversity, the study finds that companies that advocate minority gender identities rather receive high firm valuation. In particular, companies with a high percentage of female directors show high corporate value even when implementing policies that support minority gender identities. Research implications or Originality - This study explores the capital market's response to diversity using past data in the U.S., but provides more practical implications for how companies should respond to a situation where an advocacy policy, based on more social recognition, for LGBT groups is established in Korea.

• The Korean Journal of Financial Management
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• v.23 no.1
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• pp.69-100
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• 2006

We examine the effect of controlling shareholders ownership structure and related-party transactions(hereafter 'RPT') of publicly traded companies on their firm values during the post-IMF period. In the multivariate regression analysis using control variables such as firm size, capital structure, investment, dividend, profitability and industry dummy that might affect firm values, we find that there exists a significant negative relation between the controlling shareholders ownership structure and firm values proxied by Tobin's Q, and also find that there is a significant negative relation between RPT and the firm values. Those evidences seem to support the controlling shareholders' expropriation hypothesis. Additionally, we investigate the relation between ownership structure and rim value through the piecewise regression analysis. We find a significant 'inverse' U-shape pattern between the controlling shareholders ownership structure and firm values. This result is quite different from the existing literatures that have usually reported an U-shape pattern. In conclusion, the findings in this study do not support the notion that the ownership concentration to the controlling shareholders does negatively affect the firm values monotonically.

• (The) Korean Journal of Advertising
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• v.27 no.4
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• pp.71-90
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• 2016

Managers of firms often wonder whether advertising expenditure is a mere expense or an investment with foreseeable future returns. When top management makes a decision on the level of advertising expense, it must consider whether an increase in advertising spending will positively affect brand loyalty and the increased brand loyalty will positively affect profitability and firm value. We investigate the industry-specific effects of advertising spending on marketing and the effect of loyalty on financial performances using top companies in Korea, specifically, 184 firms' data from year 1998 to 2014. The empirical results of a fixed effect model indicate that the effects of advertising on customer satisfaction index and loyalty on the firms' financial performance are positive. In service industry, unlike manufacturing industry, advertising has a significantly positive effect Brand Loyalty. In addition, Brand Loyalty had positive impacts on ROA and ROE as profitability index, and Tobin's q, a market-value index. The research results suggest that advertising in service industry should be considered as customer satisfaction investment and the increased Brand Loyalty as a profit for present and a business investment for the future respectively.

• Journal of Distribution Science
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• v.10 no.8
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• pp.15-23
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• 2012

This study is an attempt to explore the nature and characteristics of strategic impact of green strategy by environmental capital, corporate reputation, and technology strengths on the firm's performance across countries. The main question addressed in this paper relates to how corporate sustainability, corporate reputation, technology strength, and capabilities influence the firm's economic performance with respect to diverse dimensions of performance measures including sustained growth through the leading firms across countries in the United States, Canada, Europe, and Asia-Pacific countries. Particularly, this study attempts to empirically explore the directions and magnitudes of the operational links between new emerging strategic core competencies (e.g., sustainability green strategy by environmental focus for more sustainable path, corporate reputation by corporate social responsibility and image enhancement, and technology strengths to develop a new product and market) and the firm's economic performance with respect to diverse dimensions of performance such as accounting (ROE and EOA) - and market-based performance (Market value and Tobin's q). Considering all possible limitations that might exist with regard to selected samples and methods, this study demonstrates that environmental sustainability, corporate reputation, technological capabilities and competencies through R&D intensity and patent are most likely to be significantly associated with most market-based performance measures, but the strategic significance of other variables such as capital intensity, leverage, and administrative cost efficiency on performance tends to be different depending on which performance measure is used across different countries with diverse economic and business contexts.