CSR (Corporate Social Responsibility) is a hot issue in the business world. CSR reflects the profit of various interested parties and has become one of the essential factors for the long term survival of a corporation. The social responsibilities of corporations are divided into economic, legal, ethical, and charitable responsibilities. CSR placed emphasis on ethical and charitable responsibilities, but the rise of the concept of sustainability from the 2000s had an immense impact on industrial profits, business survival and growth. In the late 1980s, the studies of CSR was focused on the negative image of giant companies had on the society at large. CSR is variously defined depending on the scholar's or institution's objectives. Bowen (1953) asserted CSR is one of the obligations of the seek principle and follows desirable activities for society objects and value. McGuire et al. (1998) defined the CSR as a duty for the whole society over economic and legal liability.
Recently, CSR is focused on more strategic angles from giant to small companies. It was found that the CSR activities of small and medium-sized firms effect the performance of the firms. If small and medium-sized firms engage in activities for the local society, they could gain a good reputation in the region and open up opportunities for business expansion in their own country and internationally. However, small and medium-sized companies are lacking in manpower, material resources, and understanding to implement CSR. So, they are struggling with how to do CSR activities. The small and medium-sized firms have distinct characteristics compared with big companies, and they could make unique CSR. Because small and medium-sized firms differ from large firms in terms of industrial environment and scale, it is highly likely that they differ in CSR activities as well.
Since previous CSR studies focused on large companies, it is needed to study and suggest methods for a success process of CSR for small and medium-sized firms. This study might be of help to implement CSR activities of small and medium-sized firms and link their performance. Russon and Tencati (2009) emphasized the necessity of a CSR study for only small and medium-sized firms and suggested an effective CSR strategy. This CSR study paid attention to the Korean academic society in the viewpoint of ethical management. There are lack of theory and practical CSR case studies for small and medium-sized firms in Korea.
This study tried to suggest a CSR success process for small and medium-sized firms based on previous literature studies. It is meaningful to suggest a CSR process model because there is little research on CSR of small and medium-sized companies. So, in this study, we suggested a complete success process of CSR of small and medium-sized firms including antecedents and the consequences of CSR. The model consisted of CSR stimulus factors, CSR activity characteristics and CSR results. The CSR stimulus factors were divided into inside and outside aspects and the CSR activity characteristics include congruity, concentration and differentiation. The results of CSR are classified into employee, customer and public aspects. This CSR success process is developed through variables extracted from literature studies and actual firm cases.
There are many CSR cases of small firms, including Neowiz Games, Yujin Kreves, Nano and Tech, Idis, and so on. CSR stimulating factors are divided into internal and external factors, internal factors include moral ability of organization, value and belief of the CEO, and differentiated marketing whereas external factors include policy and regulations, demands of business partners, and pressure from the public. These factors stimulated the CSR activities of small and medium-sized firms. Mostly leaders who have a high moral level activate the firm’s CSR. Recently, CSR is dealing with one of the differentiated marketing factors to appeal to customer and society, so many companies made efforts to do CSR for the differentiation of marketing. Sometimes not only public sectors, but business partners require CSR activities for the sustainability of the whole supply chain. The CSR activities are regarded as important for a strong relationship with the local community.
The required features of CSR activities for small and medium-sized firms are congruity, concentration, and differentiation. Congruity means that CSR activities should be connected with their goods and services. Concentration means that CSR activities should focus on a specific field for effectiveness because small and medium-sized firms have limited resources. Differentiation means that CSR activities are distinctive from competitors. If a small company, who has limited resources, wants to increase the performance of CSR, these three characteristics are necessary.
The results of CSR influence employees, customers, and the public. For employees, CSR activities increase self-esteem, job satisfaction, and confidence in the organization, and these lead to higher productivity, harmony between labor and management, and lower turnover of employees. For customers, successful CSR activities increase confidence and a differentiated image of the product or service and they lead to higher profits and customer loyalty. Finally for the public, successful CSR activities increase corporate awareness and an amicable image and they lead higher corporate value and potential demand.
After developing a CSR process model, this study applies it to a small and medium-sized firm, Yujin Kreves, which is a western tableware (forks and knives) making company in Korea and Vietnam. Young-Gi Moon, the CEO, established Yujin Kreves' cooperate social welfare work with the Sunny Welfare Institution in 1996. The key drivers of the CSR activities of Yujin Kreves were the CEO’s Christian faith and belief in social welfare. Vietnam has complicated regulations, policies and negative viewpoints toward foreign companies. Yujin Kreves offered free heart surgery for children and established a school and sports complex in Vietnam. The CSR activities of Yujin Kreves had the features of congruity, concentration, and differentiation. As a result of their CSR activities, Yujin Kreves is recognized as the most believable company in Vietnam and buyers regard Yujin Kreves as a high quality and good company. Also, the Vietnamese employees have high confidence in the company and cooperation with the labor progressed smoothly. They also overcame the difficulties of a big fire with one accord. Yujin Kreves' CSR activities are well known to foreign buyers. So, they built confidence in the Yujin Kreves company in trade and their products sold at a price premium.
Finally, this study also suggests implications for policy to activate CSR of small and medium-sized companies. The government should emphasize CSR through public campaigns and recognize successful CSR cases of small and medium-sized companies. Systematic CSR education is also needed for small and medium-sized companies and the government should offer standard CSR guidelines and certification.

Korea Fund of Funds (KFoF) is a public fund in operation for thirty years. It is a venture support policy implemented as a part of government policies for nurturing venture companies in Korea. During a certain period, the government is contributing to the KFoF and after the government support, the management system of KFoF is going to be shifted to revolving investment management. Also, it has become flexible in coping with the market demands as government funding is being managed in the form of fund of funds in comparison with the previous allocation of annual budgets.
Since the source of the KFoF is government finance and it is unavoidable to manage KFoF for policy goals, periodical performance management and monitoring are needed and integral. This study aimed to evaluate the performance and improvement of KFoF management in classifications such as achievement of policy goals, contribution to development of venture capital market, comparison of investment patterns, business performances of portfolio companies and so on. The results of the study are as shown below.
First, the study result on the stable financial support for SMEs and ventures, which is an important policy goal of establishment of KFoF, shows that a multiplier effect of 3.5 times has been achieved as KFoF contribution has attracted domestic and foreign private capitals. Also, the KFoF provides stable investment sources as a new commitment of an average of 200 billion KRW or less has been available annually after its establishment.
Second, as a result of the KFoF’s contribution on the development of the Korean venture capital market, it is shown that the size of KFoF-backed funds is relatively large in contrast to the size of non KFoF-backed funds in Korea. Also the KFoF has brought an effect of attracting foreign capitals into the local market.
The results represent that the KFoF contributes greatly to the development of the Korean venture capital market in total. In order to conduct comparative evaluation on the investment pattern of the KFoF, the KFoF committed funds (also called partnership funds) and overall investments in the venture capital market have been evaluated in classifications by type of industry, stage of company and regions. For the type of business, the KFoF committed funds’ proportion of investments in IT, biotechnology, environment, and energy fields is relatively high since the KFoF consistently has created green focused funds by committing some portions due to governmental policy development for green industry and new growth engines.
For the stage of company, similar patterns have been shown in both KFoF committed funds and other venture capital investments as the study shows that the proportion of investments in late stages is high in general. Henceforth, it seems that an improvement plan for increasing investments in the early stage is needed for KFoF investment.
Third, the overall S-IRR of KFoF is 1.7% as the end of 2009 based on the KFoF venture investment index called the VI Index and the multiplier is 1.05X recording performance of expecting returns higher than the principal. Also, the VI Index representing variability in KFoF annual performance is 106.64 which increased by 3.56 in comparison with the index of last year. The study shows that the business performances of KFoF-backed funds’ portfolio companies are generally improving. Growth indicators, such as growth rate of sales, growth rate of total assets, growth rate of employment and so on are maintaining a high level but profitability indicators such as ratio of operating profit to net sales, ordinary income rate on selling amount, return on equity and so on are low yet. These are because the present profitability of venture capital investment is low but it invests in companies with future growth potential which is a primary characteristic of venture capital.
The usually duration of KFoF-backed funds is long-term of more than 5 to 7 years and for the companies that were newly listed on KOSDAQ in 2009, the average period of time for listing on the KOSDAQ was 11 years after their establishment, in which IPO is a typical exit strategy of Korean venture capital. Therefore it is difficult to evaluate the performance of KFoF at this point for it has been only a short time since the KFoF was created. Also, since private equity investment, such as venture capital, focuses on unlisted companies, there is a limitation on the evaluation of performance and management of the KFoF due to the difficulties in gathering data, uncertainty of materials and evaluated profit management based on estimated data. There can be limits to evaluate the business performance of KFoF-backed funds' portfolio companies since the number of targets is too small to be an appropriate representative sample. Also, it is hard to know the exact time when the investment effects take place, since evaluations are conducted annually not considering the timing of initial inflow of capital investment.
Also, a limitation can occur when drawing the correct interpretation about the study results and in-depth evaluation since the data used for the study do not reflect the actual time when the invested capital is used, the purpose of its use, the current status of portfolio company management and so on.
For the present, the KFoF is composed of 100% government finances. Thus consistent evaluation on performance and proper management of KFoF management are essential. Hereafter it is necessary to build more delicate evaluation systems based on present evaluation systems such as VI Index. Also, venture capital is in dire need of expanded participation in pension funds, development funds of universities and so on, which are available for long-term investment considering the characteristic of venture capital investment. It is needed to consider the improvement of systems like an increase in available information such as transparency, profitability and risk of venture capital market, tax incentives for the expansion of capital sources, and incentives for performance evaluations. Also, supporting local venture capital firms to expand overseas and the advancement of management systems are important.

Since the Korean economy is considered as being trapped in a jobless economic growth stage, it is important to create jobs via implementing various economic policies. Among them, this study investigates whether the policy loan on the SMEs in Korea is being operated in employment-friendly ways. Using a micro-econometrics analysis, we compare the performance between treated and controlled establishments to calculate the employment impact. While the employment effects using an input-output table of a central bank in the perspective of macro-level public expenditure have an indirect impact on the establishments which have used policy loans, micro analysis could generate a direct impact on employment in the participating establishments relative to the non-participants.
This study focuses only on the loans associated with the ‘Small and medium Business Corporation' (SBC), which is a non-profit public organization established to implement such government policies for the development of SMEs. Regarding this program, it is well known that commercial banks are reluctant to serve SMEs. This is mainly due to lenders' incomplete information about SMEs and the firms' lack of collateral to secure commercial loans. Policy loans for SMEs, therefore, are implemented to compensate commercial banks' losses and take inherent risks, while keeping borrowing rates low relative to the commercial rates.
In this study, we evaluate the job-creation effects of the policy loans in the following ways: First, we use an establishment-level employment insurance database of the Korea Employment Information Service for the employment effects evaluation. Second, to cure a potential bias from treatment ion conditional on observed variables due to the effects of unobserved variables, we first introduce a simple two-period, two-group comparison associated with the employment effect before and after implementing government programs, which is well known as the ‘difference in difference' (DID) method. Third, since we do not know outcomes for untreated when it is under treatment, and for treated when it is not under treatment, individual performance cannot be observed simultaneously. Thus, we estimate the employment effect by comparing the performance of the treatment group that participated in the relevant policy and that of a similar control group. Forth, we propose strategies for increasing jobs with the support of policy loans for SMEs.
Analyzing the effect of SME policy funds on employment, we extracted 25,613 establishments out of the establishments that applied for policy-loans between 2005~2010. To control for double support, the sample is restricted to the establishments that applied only once to the policy loan. The employment effect of the beneficiary establishments of the SBC policy funds is analyzed to see the T+1 year, T+2 year and T+3 year,starting from target year (T).
After the policy fund support, within the three years of the research period, the result clearly shows that the number of average employees of participant establishments increased compared to that of non-participants. According to a simple DID analysis, the average number of employees of the participants increased by 1.84 persons after three years from receiving the policy loan compared with non-participants. This effect, however, seems to be a short-run phenomena as we have difficulty finding evidence of employment sustainability associated with policy loans. This result is robust with the Heckman (1976) type of adoption and usage models.
It is also investigated that the employment effects are higher in the industries such as electronic components and precision instruments than other industries. The short-run effects are higher in policy loans associated with the management stabilization, while the long-run effects observed in loans associated with the commercialization of R&D results, foundations of new economic growth, and venture business start-ups. It was also found that in the short run, working funds are an effective way of maintaining and increasing employment rather than plant and equipment investment, and vice versa. The effect of approved policy loan on employment is negatively associated with firm age and its size, while it is positively associated with the return on net sales. It also found that the collateral and debt ration of establishments do not significantly affect establishments' employment.
SME financing from the public sector seems to be essential. It has been shown that, at the minimum, there exists a significantly positive relationship between the policy fund and its effectiveness on employment in the short run. Our results also imply that when providing policy loans to increase the employees, it is more desirable to target young prospective SMEs rather than matured firms in terms of firm size and age.
Lending to SMEs via commercial banks is decreased in a recession phase, while increased in the expansion phase, causing excess investment. Policy loans can play a pivotal role in alleviating this kind of co-movement between commercial loans to SMEs and the business cycle. In particular, for maintaining and increasing employment of SMEs, policy loans in the recession phase should be concentrated on short-run working funds, while those in the expansion phase should be concentrated on long-run plant and equipment investment.
This paper is divided into four sections, including the introduction. In section 2, we introduce the methodology and the description of data used in the paper. In section 3, we empirically analyze the effect of policy loans on the establishments' employment using micro level pooled data. The last section concludes the paper by providing policy recommendations to reinforce the employment effect of loans from the public sector.

The board of directors is regarded as one of the most imperative governance mechanisms in both large firms and small and medium sized enterprises (SMEs). Although clear differences between large firms and SMEs exist, for example, in the amount of disposable resources and in the relationship between shareholders and managers, there is agreement that the board of directors plays a paramount monitoring role in improving firm performance. In particular, CEO leadership in a board room is argued to significantly affect the board’s monitoring function. Unfortunately, empirical studies examining the relationship between CEO leadership (i.e., CEO duality) and firm performance are equivocal. Building on agency and stewardship theories, the present research highlights the environmental context in examining the relationship between CEO leadership and firm performance. Based on a longitudinal data of 156 firms from deregulated and non-deregulated contexts, the results demonstrate that CEO duality leads to lower performance of firms in the deregulated context, supporting agency predictions. This result has implications for SMEs. CEO duality has been acknowledged as a major problematic governance issue that touches all types of enterprises. Although this research has practical implications for both large and small and medium sized enterprises, in fact, our findings are more specific and relevant to the context of small and medium sized firms than that of large enterprises. It is so because the separation between control decisions and management decisions rarely exists in SMEs. That is, in SMEs where the main managerial and control functions are most frequently concentrated in the hands of controlling CEO and/or owner, the result underscores the vulnerable nature of CEO duality as a control mechanism to firm performance of SMEs in uncertain and turbulent environments. Changes in the environment cause more uncertainty in SMEs than in large companies since their resources for acquiring information about the market and changing the course of the enterprise are more limited. That is, small and medium sized enterprises are more susceptible to the effects of external environment changes. Given that SMEs are more subject to uncertain forces of environmental changes, the choice of a CEO duality leadership structure might be more detrimental to firm performance of SMEs as compared to large firms which are equipped with a more diverse set of governance mechanisms.

This study investigates the intensity of technology management practices on technological capabilities and barriers to innovations in Korean small and medium enterprises (SMEs). Researchers have examined the roles of innovations on firms’ short-term performances and long-run survival and growth of firms. Under this important role of innovation, firm managers and policy makers have invested more financial resources into research and development functions to enhance innovation capabilities and seize business opportunities. Prior studies, however, have shown controversial relationships between R&D investment and firm performance. Some studies have shown positive effects of R&D investment on firm performance, guiding more investment in R&D activities. Others have shown non-significant or negative relationships between R&D investment and performance. These inconsistent relationships between R&D investment and performance show a need to explore additional factors to explain the differences and contingent effects of R&D investment on performance. Among many factors, a group of researchers have been interested in technology management practices to effectively and efficiently manage innovation processes from strategic alignment through R&D management to commercialization. In spite of theoretical arguments on technology management practice, there are few empirical studies to understand the relationships of technology management practices with innovation capabilities and barriers to innovation. Based on prior researches, we developed two hypotheses on the impacts between technology management on technological capabilities and barriers to innovations.
This paper focuses on the relationships between technology management processes on performances and barriers to innovations in SMEs. To verify hypothetical relationships, we collected and analyzed empirical data from Korean SMEs from firms older than three years in multiple industries. We asked key informants responsible for R&D investment to respond to this survey. This study measured two dependents variables. One is the level of technological capability that was measured by averaging the perceived level of product and process capabilities compared to major competitors. Another is barriers to innovation in the overall innovation processes. From eight different key difficulties around innovation processes based on related prior studies, we reduced two difficulty factors, barriers on R&D process and barriers on commercialization with four different items in each factor. The independent variable used in this paper was a measure of the intensity of technology managements. We identified five different sub-activities related to technology management from prior studies. They include market analysis and intelligence, technology strategy and planning, project and R&D management, intellectual property management, and organizational support. Each sub-activity was independently regarded as one of the key factors in technology management and critical determinants of innovation performances. All sub-activity consists of four detailed items measured by binary variables. From this measurement, the intensity of technology management added all binary measures on all activities and sub-activity was measured by the addition of the binary usage of the detailed items. This paper used several control variables. Firm age was measured by total firm years from its inception. Firm size was the natural logarithm of the total number of employees. Also another firm size variable was added by coding a binary variable depending on total sales volumes. We added another binary variable depending on the existence of a corporate R&D center. To measure government certification on technological capability, we coded one for externally certified firms in terms of technological capabilities and zero for other SMEs. We measured competitive strategy : technology leadership, cost leadership, and niche strategy. Each firm was identified with one competitive strategy as two different binary variables.
Based on data collected from 337 respondents from a survey on Korean SMEs in manufacturing sectors, the results show that the intensity of technology management is important for SMEs to enhance innovation capabilities. Total intensity of technology management practices has positive relationships with technological capabilities. It means that SMEs utilizing more technology management practices operate more competitive innovation processes and build their technological capabilities. Among sub-activities in technology management, there are different relationships with technological capabilities. Practices related to market analysis and R&D management show positive relationships. Other practices, such as technology planning, intellectual property management and organizational support, have no significant impacts on technological capabilities. This indicates market analysis and R&D management practices are more significant and important for SMEs to build their innovation capabilities.
Also the intensity of technology management practices has significantly negative relationships with both barriers to innovations, R&D process and commercialization. For the barrier to R&D processes, practices on R&D management and organizational support have negatively significant relationships with general difficulties in R&D processes. Other practices including market intelligence, technology planning, and intellectual property management show no statistically significant impacts on R&D processes. This result indicates that barriers to R&D processes are the matter of organizational systems and processes to manage overall innovation processes within the organization. The total intensity of technology management practices has a significantly negative relationship with the barrier to commercialization. Among the sub-activities, practices related to R&D management and market intelligence show negative relationships with difficulty in commercialization processes. Other practices such as technology planning, intellectual property management, and organizational support have shown no significant relationships. This result indicates that commercialization problems in innovation are rooted in practices in the early stages of innovation processes, not only assessing market potential and customer needs in the market, but also timely and strategic management of R&D projects and progress in research and development.
The study shows the importance of technology management for SMEs to build their technological capabilities and reduce difficulties in innovation processes. Most technology management and practical practices have focused on large companies with sufficient internal resources. Different from prior studies, this study examined the importance of technology management and identified some specific practices, of which one is highly related to technological capabilities and innovation processes. The most interesting technology management practice is R&D management practice. This practice has shown a positive relationship with technological capabilities and negative relationships with both barriers to innovation. It indicates that R&D management could be a baseline practice on technology management and a practical guideline for SMEs to enhance their innovation performances. Another interesting practice is market intelligence to analyze market trends and customer needs which are regarded as key factors on innovation. Apart from financial investment in innovations, technology management is another important factor for industrial firms to create and capture more value from innovation.
There are some limitations and future research directions. Most of all, we need more systematic and practical technology management models rather than highly complex and resource-intensive systems. Despite increasing interest and literature, there is still a lack of understanding on critical practices for SMEs to adopt and utilize technology management with practical viewpoints. More empirical studies are needed to test more robust models and methodology to measure intensity and quality of technology management practices. Also we need additional researches on the generalization of the relationships between technology management and innovation performances in diverse contexts and environments.