Political Influence and the Banking Sector: Evidence from Korea*

This paper uses panel data to compare the performance of Korean banks with and without effective government control of the appointment of chief operating officers. A privatization programme succeeded in spreading ownership of banks widely among the public, but government retention of an ownership stake in an institution meant de facto control by government. Despite charging lower loan rates, banks controlled by government experience higher bad loans ratios. This is in line with expectations of regulatory forbearance and government protection for recipients of political loans. Banks controlled by government are less efficient than privately controlled banks and bad loan variables are higher at banks with lower efficiency scores.     

Technology development patterns of small and medium sized companies in the Korean machinery industry

This paper presents four different patterns of technology development for small and medium sized companies in the machinery industry in a newly industrializing country, Korea. These four patterns are validated through indepth case studies. The case studies suggest that technology development patterns evolve according to firm size and the level of technological capability. In addition, the importance of non-formal methods of technology acquisition, technology accumulation, and business/technology policy for efficient technology development is also shown in this study. For the generalization of the findings, more extensive study in various industries and international comparative studies are needed.     

Pricing basket and Asian options under the jump‐diffusion process

This study derives approximate valuation formulas for basket options and Asian options under the jump‐diffusion process. To obtain an approximation for options prices under the jump‐diffusion process, we extend the Taylor expansion method developed by Ju N. ( 2002 ) under the diffusion process. We show that the Taylor expansion method, suggested in this study, provides better pricing performance as compared to log‐normal or four‐moment methods. The performance improvement using the Taylor expansion method increases as the time to maturity increases. In addition, our numerical analysis shows that jump effects become significant when the expected jump sizes take large negative values. © 2011 Wiley Periodicals, Inc. Jrl Fut Mark 31:830–854, 2011     

Overt Employment Discrimination by Multinational Firms: Cultural and Economic Influences in a Developing Country

An issue that has been explored only to a limited extent is the role that multinational firms might play in promoting or inhibiting employment discrimination based on gender in developing countries. This study focuses on this issue within the context of Thailand, a country that, until quite recently, had one of the world's fastest growing economies, driven to a large extent through investment by foreign multinational firms. The approach we take is to analyze the determinants of the inclusion of explicit gender restrictions in job announcements by both multinationals and Thai-owned firms. Some job announcements restrict jobs to male or to female applicants, and some are silent on the issue of gender. Others specifically invite both male and female applicants. There are no laws in Thailand restricting gender-based discrimination nor requiring "equal opportunity" language on the part of private employers.
The analysis examines the relationship of the cultural characteristics of the firm's home country, along with economic growth in the host country, with the likelihood of various gender-based restrictions being placed in job announcements. We employ widely used measures of national culture developed by Hofstede.Empirical results demonstrate relationships between discrimination and certain of Hofstede's cultural dimensions. Economic growth was not found to have an impact on discrimination. Control variables in the study include dummy variables to control for occupation and the industry of the employee firm.     

Valuation and applications of compound basket options

This study investigates compound basket options, which are options on portfolios of options. Although they may be new to financial markets, they are available as equity basket options, equity spread options, stocks of holding companies, and collateralized debt obligations. Using moments of portfolio values, we provide formulas for pricing compound basket options. According to numerical analysis, a lower bound and a weighted average of bounds yield relatively small errors. Additionally, ignoring the compound feature increases the pricing error of equity basket options because the feature captures the capital structure and leverage effect of stock prices.     

When are ‘sharks’ beneficial? Corporate venture capital investment and startup innovation performance

The effect of corporate venture capital (CVC) investment on startup innovation performance has been examined in the extant literature. However, when this effect is enhanced is the important but relatively understudied question in strategy and entrepreneurship research. We build on the idea of regarding CVC investment relationships as learning alliances and introduce two situational factors as boundary conditions on the performance effect of CVC investment. In order to handle the endogeneity of CVC investment, we employ propensity score matching and differences-in-differences techniques. Based on the sample of startups in the human biotechnology industry in the United States, we find that CVC funding is beneficial for startup innovativeness when CVC investment is established after initial independent venture capital funding. Moreover, a startup’s patent stock before CVC funding also influences on that effect.     

Intercultural sensitivity and tourism patterns among international students in Korea: using a latent profile analysis

The purpose of this study is to examine the intercultural sensitivity of international students in Korea based on Chen and Starosta’s [(2000). The development and validation of the intercultural communication sensitivity scale. Human Communication, 3, 1–15] intercultural sensitivity scale using a latent profile analysis and to discuss tourism patterns of each group segmented by intercultural sensitivity. According to the analysis, international students were classified by intercultural sensitivity with four groups: introverted observer, defensive bystander, favorable crowd, and veteran. Based on their characteristics and tourism patterns of each group, theoretical and practical implications were suggested. Considering the growing overseas education particularly in non-English-speaking countries and its significant influence on tourism, this study connected the multiple constructs in various fields such as intercultural contact, international student mobility, and tourism, providing a quintessential example of multidisciplinary research.     

Strategies for Linking Vertical Cooperative R&D to Commercialization in Korea

Since 1982, the government of Korea has actively promoted vertical cooperative R&D programs between government-sponsored research institutes (GRIs) and private firms. A number affirms participated in the programs because cooperative R&D could lower the risk and could contribute to rapid commercialization of many technologies. In this article, Chulwon Lee, Zong-Tae Bae, and Jinjoo Lee examine the effectiveness of participant firms' strategies for commercial utilization of cooperative R&D results, from the viewpoint of technology sourcing at the project level. The data have been obtained from 162 cases of vertical cooperative R&D projects from a diverse group of industries in Korea. Three different commercialization strategies are empirically derived through cluster analysis of the relative usage rates of cooperative R&D and of other supplementary technology acquisition methods. They find that the effectiveness of these strategy clusters varies significantly according to the types of innovation, that is, project-business relatedness. If the project belongs to an existing business area, in-house development augmented cooperative R&D strategy is the most effective. On the other hand, licensing-in supplemented cooperative R&D strategy is the most successful, if the project belongs to a new business area. Findings suggest that firms participating in cooperative R&D projects should try to utilize other supplementary technology acquisition methods in order to achieve commercial utilization of cooperative R&D results.     

A comparative analysis of leveraged recapitalization versus leveraged buyout as a takeover defense

Two types of defensive scheme—leveraged buyout (LBO) and leveraged recapitalization (LR)—are examined. In particular, this article examines (1) whether the two similar defensive tactics affect stockholder returns differently and (2) what firm attributes are associated with stockholder gains in LBO and LR announcements. This study finds that stocks of both LBO and LR firms, on average, exhibit significant positive abnormal returns during the announcement period, but that the latter experience substantially smaller returns than the former. This study further finds that while mitigation of agency problems associated with a firm's free cash flow is present for both LR and LBO firms, it is more pronounced for the LBO firms. These results provide evidence that a firm with higher free cash flow could benefit a greater reduction of agency costs by going private through a LBO plan than by remaining public through a LR plan.