• The Journal of Industrial Distribution & Business
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• v.11 no.1
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• pp.39-47
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• 2020

Purpose: This study investigated the effects of valuation errors on the capital market through the earnings forecasting errors of financial analysts. As a follow-up to Jensen (2005)'s study, which argued of agency cost of overvaluation, it was intended to analyze the effect of valuation errors on the earnings forecasting behavior of financial analysts. We hypothesized that if the manager tried to explain to the market that their firms are overvalued, the analysts' earnings forecasting errors would decrease. Research design, data and methodology: To this end, the analysis period was set from 2011 to 2018 of KOSPI and KOSDAQ-listed markets. For overvaluation, the study methodology of Rhodes-Kropf, Robinson, and Viswanathan (2005) was measured. The earnings forecasting errors of the financial analyst was measured by the accuracy and bias. Results: Empirical analysis shows that the accuracy and bias of analysts' forecasting errors decrease as overvaluation increase. Second, the negative relationship showed no difference, depending on the size of the auditor. Third, the results have not changed sensitively according to the listed market. Conclusions: Our results indicated that the valuation error lowered the financial analyst earnings forecasting errors. Considering that the greater overvaluation, the higher the compensation and reputation of the manager, it can be interpreted that an active explanation of the market can promote the accuracy of the financial analyst's earnings forecasts. This study has the following contributions when compared to prior research. First, the impact of valuation errors on the capital market was analyzed for the domestic capital market. Second, while there has been no research between valuation error and earnings forecasting by financial analysts, the results of the study suggested that valuation errors reduce financial analyst's earnings forecasting errors. Third, valuation error induced lower the earnings forecasting error of the financial analyst. The greater the valuation error, the greater the management's effort to explain the market more actively. Considering that the greater the error in valuation, the higher the compensation and reputation of the manager, it can be interpreted that an active explanation of the market can promote the accuracy of the financial analyst's earnings forecasts.

• Journal of Agricultural Extension & Community Development
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• v.18 no.3
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• pp.351-384
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• 2011

The purpose of this study is to look at the case of the German compensation system for farmers' accidents and to build a basic scheme in our country's compensation system for farmers' accidents. When you view examples of Germany, the social insurance scheme for farmers accidents in korea should be design as an independent institution from the existing industrial accident insurance, and it comes to relationships with other social insurance system, preferably with complementary personalities. A general rule of the compensation system applies to all farmers in principle but the coverage limits part-time farmers. Financial burden consists of the mix of insurance premium and state aid. The type and level of benefits is similar to the current industrial accident insurance, which give priority to places on economic security for keeping farmworks, such as cost for using temporary farmers, rather than income loss. In terms of financial system, pay-as-you-go system would be better because of immediate payment with the introduction of the compensation system. The compensation system might be managed and administrated by the existing nationwide organization. Of course, for operating of system review and further research on the technical details such as premium issues and funding problems of government support, the exact classification of the target coverage, premiums based on estimated income for the farmers' estimation, the exact statistical data on the accumulation of agricultural disaster is needed.

• The Journal of Economics, Marketing and Management
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• v.7 no.1
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• pp.15-25
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• 2019

Purpose - This paper attempts to derive effective performance-reward strategies for SMEs to raise the valence for their employees while using their relatively limited resources, which is one of the primary concerns raised by SME CEOs. Research design, data, and methodology - This paper draws on the four question items such as the financial/direct factors, the financial/indirect factors, the non-financial/direct factors and the non-financial/indirect performance-reward factors to shed light on the most important factors and aspects that need improving, using the AHP and IPA. Results - The overall findings on the SMEs' performance-reward factors of interest here are indicative of the need for rectifying their performance-reward systems. Conclusions - SMEs' performance-reward factors of interest here are indicative of the need for rectifying their performance-reward systems. In particular, despite the fact that SMEs can hardly offer high wages or bonuses as large enterprises do, the expectancy theory suggests it is better to reward employees as per a valid common system, while the equity theory underscores the need to maintain and reinforce the fairness in distribution, procedures and interactions.

• The Korean Journal of Financial Studies
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• v.10 no.1
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• pp.249-269
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• 2004

Free cash flow is known as a typical type of agency conflict between managers and shareholders in a firm. The insurance industry, which is not growing, is particularly susceptible to such excessive cash flow. We herein investigate the effects of stock ownership plans on reducing agency conflicts. We adopt undistributed cash flow to proxy free cash flow, and size, default risk, group membership, leverage, investment opportunity, and stock options are selected as explanatory variables. We find that stock option plans are effective(at a 10% level) in reducing free cash flow.

• Journal of the Korean Society of Safety
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• v.34 no.1
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• pp.115-121
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• 2019

Background: Due to the diversification and advancement of research, researchers have become to deal with a variety of chemical and biological harmful materials in the laboratories of universities and research institutes and the risk has increased as well. Therefore, it is necessary to strengthen the social safety net for laboratory accidents by strengthening the compensation to the level comparable to that of Korean Workers' Compensation & Welfare Service, when the researchers become physically disabled by laboratory accidents. The purpose of this study is to secure researchers' health rights and to create a research environment where researchers can work with confidence by strengthening the compensation to the level comparable to that of Korean Workers' Compensation & Welfare Service. Method: We analyzed the laboratory accidents by year, injury type, severity of accident and disability grade with the 6 year data from 2011 to 2016, provided by Laboratory Safety Insurance. Based on the analysis result, we predicted the financial impact on Laboratory Safety Insurance if we introduce a compensation annuity by disability grade which is similar to Injury-Disease Compensation Annuity of Korean Workers' Compensation & Welfare Service. Result :As of 2011, the insured number of Laboratory Safety Insurance was approximately 700,000. The Average premium per insured was KRW 3,339 and there were 158 claims. Total claim amount was KRW 130 million, whereas the premium was about KRW 2.3 billion. The loss ratio was very low at 5.75%. If we introduce a compensation annuity by disability grade similar to Injury-Disease Compensation Annuity of Korean Workers' Compensation & Welfare Service, the expected benefit amount for 1 case of disability grade 1 would be KRW 1.6 billion, assuming 2% of interest rate. Given current premium, the loss ratio, the ratio of premium income to claim payment, is expected 41.4% in 2017 and 151.6% in 2026. The increased loss ratio due to the introduce of the compensation annuity by disability grade is estimated to be 11.0% in 2017 and 40.4% in 2026. Conclusion: Currently, laboratories can purchase insurance companies' laboratory safety insurance that meets the standards prescribed by Act on the Establishment of Safe Laboratory Environment. However, if a compensation annuity is introduced, it would be difficult for insurance companies to operate the laboratory safety insurance due to financial losses from a large-scale accident. Therefore, it is desirable that one or designated entities operate laboratory safety insurance. We think that it is more desirable for laboratory safety insurance to be operated by a public entity rather than private entities.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.3
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• pp.305-313
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• 2019

The study examines whether higher CEO compensation is related to unobserved future firm performance in an emerging market, Pakistan. Further, it extends its scope to analyzing the impact of group affiliation and ownership concentration on the relationship between CEO compensation and future firm performance. The study uses an unbalanced panel data consisting of 1508 firm-year observations from 225 non-financial listed companies in Pakistan Stock Exchange (PSX) for period 2005 to 2012. The multiple regression models adjusted to heteroskedasticity and autocorrelation in error terms are used. The study finds that, in general, CEO compensation is positively associated with future operating performance. However, higher CEO compensation leads to lower operating performance in firms that have lower ownership concentration and are affiliated with business groups. When firms are not affiliated with any group and have high ownership concentration, the relationship between excessive CEO compensation and future operating performance becomes insignificant. Given that efficient compensation packages may lead to long term value creation to shareholders and reduce agency problems, this study highlights an important moderating role of ownership concentration and group affiliation of the firms in emerging markets.

• Asian Journal of Business Environment
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• v.13 no.4
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• pp.7-17
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• 2023

Purpose: The objective of this study is to evaluate the fringe benefits provided by the entrepreneurs in BSCIC (Bangladesh Small and Cottage Industries Corporation) industrial estates in light of the relevant labor laws of Bangladesh. Research question: Fringe benefits are one of the major factors in compensation that play a vital role in employee satisfaction. However, the issue has yet to be taken into consideration in the industrial units. So, the question arises: what is the present condition of employee fringe benefits in industrial estates? Research design, data, and methods: To conduct this mixed-methods research, a total of 222 respondents were selected randomly from employees and entrepreneurs. Two sets of self-administered questionnaires and KIIs were used to collect primary data, while SPSS was used to analyze the data. Major findings and conclusions: The study shows that the conditions of leave and holidays do not comply with labor laws. Further, aspects of maternity leaves, disability/death benefits, retirement benefits, and other financial and non-financial benefits are found not to be at a satisfactory level and do not comply with the existing labor laws. However, the benefits relating to environmental issues are found to be satisfactory. It is expected that the study findings will contribute to the existing literature related to fringe benefits and will help stakeholders and policymakers in formulating and monitoring compensation packages.

• The Journal of Society for e-Business Studies
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• v.19 no.3
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• pp.1-21
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• 2014

Personal information is a requisite for financial transactions as well as a core asset of financial companies. However, as a side effect of the information society, personal information infringements have emerged as significant social risks, causing realized loss to individuals and companies. This study analyzes results of financial and emotional loss in terms of consumer loss and also presents usefulness of insurance in order to minimize such actual damages as a means of risk transfer. In addition, this study investigates components and premium calculation principles of compensation insurance against personal information invasion and finally presents policies to activate these insurance product. As a method of risk management, insurance not only is a useful tool to guarantee consumer protection and companies' financial soundness simultaneously but also provides a basis of quantitative measurement of IT risks.

• Journal of Environmental Policy
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• v.3 no.1
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• pp.1-29
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• 2004

The role of the financial institution to promote corporate sustainability may be reviewed in two angles, as a commercial lender and an investor. As a commercial lender, financial institutions should minimize the legal risks and the political risks. Financial institutions began to recognize environmental risks as legal risks that directly affect their lending practices since the legislation of the Comprehensive Environmental Response, Compensation, and Liability Act("Superfund") of the U.S.A. The so-called lender liability rule has a detailed guideline where the financial institutions may be exempted from the Superfund Liability. Similar attempts are noticed in the recent EU White Paper on Environmental Liability. In Korea, comprehensive environmental liability laws are yet to be developed. The Soil Environment Preservation Act now includes a far-reaching environmental liability provisions, where the owners and operators as well as receivers of the facility bear responsibility. However, whether the financial institutions may be captured as a potential responsible party is not very clear. Until the relevant legislation is developed and court decisions accumulate, Korean financial institutions are well advised to raise awareness on this issue, to develop environmental policies and to train personnels.

• Journal of Korean Society for Quality Management
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• v.49 no.3
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• pp.313-326
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• 2021

Purpose: Prior studies have sought to find antecedent to improve firm performance. However, research on compensation systems and employees' psychological mechanisms have been relatively limited. In this sense, this study has investigated the impact of compensation gap between TMT and employees on firm performance, and explored the factors that affect the above relationship. Specifically, this study analyzed the direct impact of compensation gap on firm performance. In addition, the process of compensation gap to firm performance is assumed to be significantly influenced by employees' recognized promotion system and satisfaction with TMT. Therefore, we examined moderating effects of both promotion probability and opportunity, and satisfaction with TMT on the relationship between compensation gap and firm performance. Methods: For empirical test, financial variables were collected from TS-2000 database, and moderating variables were collected form Job Planet for listed firms in Korea. We conducted hierarchical regression analysis to test hypotheses. Results: The findings of empirical analysis are as follows. First, compensation gap between TMT and employees had a positive effect on firm performance. Second, when promotion probability and opportunity was high, the effect of compensation gap on firm performance was strengthened. Third, when satisfaction with TMT was high, the positive effect of compensation gap on firm performance was also strengthened. Conclusion: Our findings have expanded prior research on human resource management and labor relation by identifying the positive role of compensation gap between TMT and employees on firm outcome. Moreover, our results also indicated that promotion probability and opportunity, and satisfaction with TMT, which has not been addressed well in previous studies, were important conditions enhancing the positive relationship between compensation gap and firm performance. Finally, this study suggest several theoretical and managerial implication with future research direction.