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| This paper introduces a new conceptual approach to technological innovation capability (TIC) specialized in SMEs’ internationalization through literature research and uses this conceptual framework in the tests of a range of hypotheses covering the relationship between TIC, international performance and modes of internationalization, with special reference to Korean Small and medium sized enterprises (SMEs). It is based on a recent survey covering 282 Korean manufacturing SMEs. The analyses addressed the results that SMEs possessing superior TIC are involved in greater degrees of internationalization, whereas those with inferior TIC are struggling with fewer outcomes resulting from lower degrees such as exporting, licensing and joint venture in that order. The foundings after sub-categorization of TIC further ascertained that SMEs’ internationalization processes and international performance are positively affected by the extent to which Korean SMEs adopt particular TIC dimensions. |
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| In the face of agency problems surrounding dividends payout, strong corporate governance attempts to distribute excess cash flows to shareholders if attractive investment opportunities are rare. Using the publicly traded firms from 2001 to 2010, this paper finds that dividends are positively associated with board expertise measured by experience as outside directors and accounting competency. However, the positive association between dividends and board expertise is attenuated in small- and medium-sized enterprises (SMEs). Other board characteristics such as board independence and legal expertise do not show positive associations with dividends. The results imply that the board effectiveness in monitoring management and distributing dividends is improved by outside directors’ quality, rather than by the formal appointment of outside directors itself. Also, the results suggest that the board effectiveness is lower in SMEs than in large firms. |
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The recent paradigm change to knowledge-based economy brings about much serious market risks to business, in particular to small and medium companies (SME), which requires direct financing such as issuing bonds and stocks rather than indirect financing such as bank loans. However, SMEs in Korea considerably depend on indirect financing. In 2012, 99.4% of Korean SMEs financing comes from bank loans, while issuing securities (bonds and stocks) takes only 0.6% of the total financing. On the contrary, major companies get 61.5% of their financing from bank loans and 38.5% from issuing securities. These numbers indicate that Korean SMEs face serious financial problems of high cost and low profit by using loans especially in the economic downturn.
In this paper, we investigate the financing problems Korean SMEs experience and try to find solutions for the problems. The solutions focus on boosting up direct financing for SMEs. The direct financing market, named pre-board, was open as a third market in 2000 only for SMEs and innovative companies to get financing and secure liquidity by issuing securities. However, it has been snubbed by investors due to the dependence of SMEs on government policy loans as well as many fraudulent activities and unclear financial practices. This phenomenon is quite contrary to the cases in the countries like U.S.A (NYSE Alternext), England (London AIM), German (Entry Standard) and Japan (Tokyo AIM).
The reason the direct financing markets of England and U.S.A are considered successful can be attributed to the fact that in those countries credit evaluation is driven by private sector rather than governmental sector and the capability of the private sectors is quite high. In this paper, we provide some examples of success and develop alternatives such as resolving information asymmetry, crowd-funding, new product development to solve the problems. |
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This paper addresses disclosure practices in response to earnings performance. Specifically, this paper separately analyzes financial and promotional disclosures under Regulation Fair Disclosure using a sample of publicly traded firms on the KSE and KOSDAQ markets from 2003 to 2008. First, I find that financial disclosures are positively associated with earnings performance while promotional disclosures are negatively associated with earnings performance. Second, the positive (negative) association between financial (promotional) disclosures and earnings performance is stronger in KOSDSAQ firms than KSE firms. Lastly, the strong sensitivity of disclosure frequency to earnings performance in KOSDAQ firms is weakened with good corporate governance. The results suggest that good performance motivates management to provide more disclosures regarding financial information whereas poor performance drives management to hold back financial information and instead activate promotional disclosures to justify or boost stock prices. This discretionary disclosure is stronger in KOSDAQ firms than KSE firms. However, strong corporate governance plays a role in limiting opportunistic disclosures in KOSDAQ firms.
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중소기업연구
