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The authors show that there is a negative relationship between economic policy uncertainty (EPU) and firm overinvestment using Korean data from 2007 to 2016. Since Jensen (1986) shows that a firm's free cash flow is an important factor of overinvestment, the authors examine how free cash flow influences the sensitivity of overinvestment to EPU. The authors find that a high level of free cash flow attenuates the negative effect of EPU on overinvestment. The authors find that there is no significant difference in the effect of EPU on overinvestment between Chaebol (Korean family-run conglomerates) and non-Chaebol firms, which is consistent with the literature that the features of Chaebol are weakening.

The authors estimate systemic risk in the Korean economy using the econometric measures of commonality and connectedness applied to stock returns. To assess potential systemic risk concerns arising from the high concentration of the economy in large business groups and a few export-oriented sectors, the authors perform three levels of estimation using individual stocks, business groups, and industry returns. The results show that the measures perform well over the study’s sample period by indicating heightened levels of commonality and interconnectedness during crisis periods. In out-of-sample tests, the measures can predict future losses in the stock market during the crises. The authors also provide the recent readings of their measures at the market, chaebol, and industry levels. Although the measures indicate systemic risk is not a major concern in Korea, as they tend to be at the lowest level since 1998, there is an increasing trend in commonality and connectedness since 2017. Samsung and SK exhibit increasing degrees of commonality and connectedness, perhaps because of their heavy dependence on a few major member firms. Commonality in the finance industry has not subsided since the financial crisis, suggesting that systemic risk is still a concern in the banking sector.

There is a great reliance on fiscal incentives to sustain the automotive industry competitiveness due to several structural problems, among them the inefficiency of the supply chain. This paper aims to compare the supply chain structure of traditional automotive industry with the supply chains from South Korea and China. Based on strategic decision and transaction cost theory, this comparison seeks to exploit the factors that led to the inefficiency of automotive supply chains.

The authors used a qualitative approach and applied a multi-method research. They conducted semi-structured interviews with six executives from automakers representing the selected countries, carried individual meetings during one workshop and used secondary data from several sources.

Concepts identified in the research such as reliability, supply chain governance and automaker competencies led the authors to propose that the traditional automakers have higher transaction costs when compared to the new automakers due to the horizontal structure of their supply chain. While new competitors have vertical upstream supply chains, which indicates better profitability, traditional automotive industry is horizontal, depends on fewer Tier 1 suppliers and is disconnected from Tier 2, impacting negatively in the transaction costs and supply chain management.

This study suggests that automotive executives rethink the current upstream supply chain model by identifying the competencies required for their current and future competitiveness and implementing a vertical integration of these competencies.

This research exploited the inefficiency of supply chain as one of the explanations for the low competitiveness of the national automotive industry.

This paper examines whether long-term foreign investors may force firms to use a costly dividend to mitigate inefficient managerial behavior. The authors also hypothesize that the relation between foreign investment horizons and payout policy depends upon the extent of the corporate governance. The authors find that firms held by long-term foreign investors make dividend more often in the subsequent years. The authors also find that foreign investors with long-term investments do not cause firms to pay dividends when firms have strong corporate governance. It suggests that long-term foreign investors serve as a substitute for strong corporate governance with respect to controlling agency conflicts.

While the value of human capital for technological innovation is well acknowledged, literature on the role of vocational training in corporate innovation is notably scarce. The purpose of this study is to assess the effect of government support for small and medium-sized enterprise (SME) competencies on Korean firms’ innovation. The author investigates SMEs’ patent applications (supported by the government to varying degrees) while accounting for firms’ market position, ownership and management structure, as well as prior changes in firms’ technologies, products, processes and other characteristics. Alternative hypotheses about management motivation – the “lazy manager”, “career concerns” and “special East Asian institutional constraints” hypotheses – are also evaluated.

Censored and count data analysis methods are used on a panel of 595 Korean firms covering 2005–2015 from the Korean Human Capital Corporate Survey, Intellectual Property Office and National Investment Commission. A regression discontinuity estimator accounts for potential endogeneity because of support for vocational training at firms.

Firms receiving training support are more innovative than firms without support, but latent effects may play a role. The regression-discontinuity model suggests that firms that succeeded only marginally in obtaining support had higher innovative output than non-recipients near the eligibility threshold.

The findings of this study establish that government support had the intended effect on SMEs’ technological capacity. This cannot be discounted as a simple crowding-out effect. The author also establishes that management–ownership separation within firms was conducive to innovation, that product competition had an inverse U-shaped effect and that management–ownership separation had a substitutable relationship with competition in overcoming managers’ effort avoidance. The findings support the “lazy manager” hypothesis over the “career concerns” and the “special East Asian institutional constraints” hypotheses.

In this paper, the authors aim to offer a cross-cultural comparison of the boycott intentions of university students in Canada with those of students in Korea.

The data were collected from students at Inje University and York University via self-administered questionnaire. A t-test found that Canadian students’ answers showed significantly greater scores in ethnocentrism, boycott attitudes prior to reading the target article and motivations related to self-enhancement compared to those acquired from Korean students. However, the motivation of counterarguments and the boycott intentions of Korean students’ toward Rogers, the parent company of Maclean’s magazine, showed significantly higher scores than those gained from Canadian students.

The boycott case used in the study is Maclean’s magazine, a Canadian news magazine, which published a controversial article called, “Too Asian? Some frosh don’t want to study at an “Asian” University”. A noticeable gap in each group of students’ boycott attitude and intentions toward Rogers, the parent company of Maclean’s magazine was found.

In the multiple regression analysis, the boycott motivation of self-enhancement was the most influential variable on boycott intentions. The boycott case examined in this paper is a practical case study of cross-national grouping as well as the perceptional difference of the locus of corporate accountability that comes from cross-cultural backgrounds.

In the 1990s, following the challenges imposed by globalisation, the liner shipping industry experienced profound changes, leading major carriers to create ad-hoc logistics business-units. Nevertheless the vertical integration of shipping lines along the transport chain faced important entry barriers in various regions.This paper aims at analysing the impact of such barriers on carriers’ pathways of expansion in the logistics business. It mainly focuses on the East-Asian market, as a relevant empirical case in which important institutional and socio-political obstacles are still in force .Main results disclose sui-generis paths of expansion achieved by major carriers, in contrast with linear constructs of time and space proposed by classical TNC theories. In such respect, port operations reveal to be the most critical stage of the chain. The ‘sidestep’ of the port phase, leading to investments in other on-shore activities (warehousing, inland terminals, etc.) as well as the implementation of aggressive financial campaigns (acquisitions and takeovers), reveal the unfaltering will of top shipping lines: the quick achievement of a successful vertical and horizontal expansion despite environmental obstacles.

The authors propose and test a theoretical framework that develops and analyzes precursors to firm acquisitions to determine if acquirers differ from other firms.

The authors use longitudinal, archival data from a sample of the largest firms in the global pharmaceutical industry from 1991 to 2012 with 1,327 firm-year observations.

The authors integrate prior research to show that the firm characteristics involving (1) R&D investment, (2) prior experience and (3) network centrality influence the likelihood that a firm will complete an acquisition.

In contrast to research focusing on the performance of acquiring firms, the authors show that firm characteristics predict acquisition activity by highlighting that acquiring firms differ from other firms. The authors also develop how network synergies can be realized by acquirers that have information advantages from more central network positions.

This paper aims to examine the impact of the corporate lifecycle on the corporate governance practices of firms in the Republic of Korea.

The authors use five corporate lifecycle measures and corporate governance scores from Black et al. (2012) to estimate governance-prediction models inclusive of corporate lifecycles measures for a sample of 497 Republic of Korea firms over the 1998–2004 period.

The authors find little evidence which points to a corporate governance lifecycle for firms in the Republic of Korea. The findings suggest that factors other than firm lifecycle best explain the corporate governance practices of firms in Korea.

Using a battery of lifecycle measures and corporate governance indexes and subindexes, the authors believe this paper represents the most rigorous study yet to study the corporate governance lifecycle in an emerging market economy, namely, the Republic of Korea.

This paper examined the future prospects of China’s economic development and its impact on the East Asian Economy and the economic integration of the region. The key issue to China’s economic growth is the contradiction between the socialist political system and a market-based economy. The overall assessment is that China will be able to manage the transformation of the nation into a steadily growing market economy.

We also found that China is the key country forming a triangular trading block which has implemented the international division of labor in the North-East Asian region. China’s rapid export growth and increased market share in the world economy is not a threat but a new opportunity for the East Asian countries. The rise of China will certainly be accompanied by an expansion of a consumer market, which will also broaden business opportunities for East Asian.

Despite the interdependence between East Asian countries, a regional trading bloc embracing East Asia has not been created yet. The future prospects for realizing the vision of a regional free trade agreement in East Asia in the foreseeable future is not bright, either.