Corporations In Korea Research Articles

식품기업의 ESG 경영이 재무성과와 기업가치에 미치는 영향

ESG (Environment, Social and Governance) activities of food manufacturing companies are likely to affect consumers’ consumption behaviors and companies’ management performance; however, research on the effects of ESG activities on management performance for food manufacturing industry is still in its early stage due to data access problems in Korea. In this study, we constructed panel data for the top 30 food manufacturing companies based on revenue over a period of seven years (2016∼2022) to examine the effects of ESG evaluation ratings on their management performance such as financial performance and corporate value. For the analysis, we employed fixed-effects specification, and used ESG rating data evaluated and released by the Korea Corporate Governance Service, as well as financial information and corporate valuation data published by the Financial Supervisory Service and the Korea Exchange. We find that the ESG rating of food manufacturing companies did not have a statistically significant effect on return on sales (ROS) and return on equity (ROE). However, results indicate that the rating had a statistically significant positive effect on price-to-book ratio (PBR) and Tobin’s Q. This suggests that the ESG activities of food manufacturing companies can potentially be an effective management strategy in enhancing the value of the companies in both the shrot and long-term dimensions.

Linking Authentic Leadership with Follower Outcomes: Mediating Roles of Follower’s Hope and Perceived Organizational Support

Purpose – The primary objective of this study is to examine the impact of authentic leadership on follower outcomes. The research specifically aims to explore the role of two under-considered psychological factors – hope and perceived organizational support – in mediating the relationship between authentic leadership and its outcomes on followers. Design/Methodology/Approach – This study utilizes organizational support theory and hope theory as foundational frameworks. It employs an empirical approach to investigate how perceptions of authentic leadership influence followers’ individual motivational states and their perceived organizational support, ultimately affecting their outcomes. Findings – The research, which encompassed a study of 241 employees from various corporations in Korea, demonstrated that both hope and perceived organizational support significantly mediate the relationship between authentic leadership and follower outcomes. The results indicate that followers’ hope and their perception of organizational support play critical roles in linking authentic leadership to reduced turnover intentions and enhanced organizational citizenship behavior. Research Implications – This study contributes to the broader discourse on leadership and organizational behavior by highlighting the importance of psychological factors in the dynamics of leadership and its effects. The findings underscore the necessity of incorporating elements like hope and perceived organizational support in understanding and fostering effective leadership within organizations. The study also opens avenues for future research to explore these dynamics in different organizational contexts and cultures.

Examining Software Bill of Materials (SBOM) Adoption in Global Logistics Systems

Purpose - This study informs supply chain organizations about the risks of logistics system and proposes SBOM as an emerging alternative to global system management. Through experiments, it is found the factors that lead to the utilization of SBOM. This study aims to contribute to the practicalization of SBOM in Korea, which is spreading to global corporations including the United States. Design/Methodology - This study examined the factors affecting the adoption of SBOM based on the technology acceptance model (TAM). The survey was conducted among Logistics System managers. A total of 439 surveys were used in the analysis from January 23, 2023 to February 17, 2023. Structural equation analysis was conducted to validate the hypotheses of the study. Findings - Findings in this study indicate that Logistics System practitioners perceive all of SBOM’s features to be easy to use, and they are strongly associated with future adoption intentions. However, they only perceive security and relative benefits as useful features of SBOM, and not transparency and licensing. Transparency and license of the system structure do not appear to have a significant impact on supply chain operations. However, the relative advantage and security of SBOM are useful for supply chain operations, and these are strong drivers for using SBOM. Originality/value - Logistics systems have high business value because corporations in various countries and industries share information. To secure such global systems and exchange information securely, SBOM is emerging as a new alternative. However, although SBOM is spreading in the United States under the leadership of the government since 2021, its use cases are hard to find in Korea. Therefore, this study provides practical implications for corporations in Korea to securely manage global logistics systems. It is also valuable academically as an initial study on the application of SBOM to the global Logistics System, which is becoming an issue.

The effect of ESG activities on financial performance: The moderating effect of debt ratio

This study examined the effect of environmental, social, and governance (ESG) management on corporate performance. We collected sample data on KOSPI-listed companies in 2021 using ESG ratings released by the Korea Corporate Governance Service. The system of ratings was segmented into three distinct categories for the purpose of analysis, namely the environment, society, and governance. An empirical investigation was conducted to determine how ESG ratings and separate ratings (E, S, and G ratings) affect financial performance. We also examined the moderating impact of the debt ratio on the association between ESG ratings and financial performance to enhance the explanatory strength of this relationship. The results indicated that ESG ratings and E and S ratings are positively related to financial performance, and the debt ratio has a negative moderating effect on the link between ESG ratings related to environmental aspects and financial performance. The findings indicate that firms need ESG management to improve financial performance. ESG ratings can be utilized to show the effects of environment-focused management, sustainability, and CSR initiatives on financial performance. Additionally, the moderation effect of the debt ratio in this study clearly demonstrates the connection between ESG rating and financial performance. Our analysis also demonstrates that organizations with high debt ratios and a lack of resources to pursue ESG are unable to devote a significant amount of time and resources to ESG management.

리더의 여성성과 남성성이 혁신 행동에 미치는 영향력에 관한 연구

The purpose of this study was to examine the impact of both traditional masculine character and an emerging theme of feminine character of leaders on innovative behavior of employees in large corporations in Korea. This is because feminine character of a leader has been studied as a new paradigm recently, and may contribute to an organization’s high achievement, thus promoting soft power and innovation. At the same time, this study explored the mediating role of discriminatory treatment and diversity inclusion. This study surveyed 1,061 employees of 43 companies selected from Interbrand's Best Korea Brands. Results were as follows. First, feminine character of a leader significantly decreased discriminatory treatment and increased diversity acceptance while masculine character of a leader was only linked to high level of discriminatory treatment. Second, only diversity acceptance, not discriminatory treatment, had a significant and positive relationship with innovative behavior in a company. Finally, diversity acceptance played a full mediation role between feminine character of a leader and innovative behavior of employees, suggesting that feminine character of a leader and diversity acceptance in a company should be treated importantly.

경영자 능력이 사업위험에 미치는 영향

[Purpose] This study aims to analyze the impact of managerial abilities on a company’s business risks and examine whether ESG (Environmental, Social, Governance) management has a differential effect. [Methodology]The study conducts an empirical analysis on manufacturing companies listed in the Korean Stock Exchange and KOSDAQ from 2012 to 2022. It utilizes the Earnings Downside Risk (EDR) measure proposed by Konchitchki et al. (2016) as a metric for business risk and assesses Managerial Ability using the method developed by Demerjian et al. (2012a). Additionally, the study employs ESG rating data from the Korea Corporate Governance Service(KCGS). [Findings]The study reveals that ESG management significantly lowers business risk, with superior Managerial Ability playing a crucial role, especially in companies focused on ESG practices. This suggests that effective management skills in ESG－oriented companies are key to reducing business risk. [Implications]The study indicates that effective ESG management in companies can lead to long－term competitiveness and reduced business risk, with skilled managers playing a key role in achieving strategic benefits like cost savings, improved efficiency, and a better corporate image.

경제적 어려움 하에서 ESG와 기업가치의 관계

[Purpose] This study examines the effect of environmental, social, and governance (ESG) performance on corporate value in the face of economic difficulties. If a company’s survival is at stake, we predict that the capital market will focus on increasing the viability of a firm more important than the long-term benefits of ESG engagements.
 [Methodology] We use sales decline as a proxy for economic hardship. A firm’s sales decline is measured in a variety of ways：relative to the firm’s own sales in the preceding year or relative to the change in aggregate sales of the industry in the concurrent year. Additionally, we use operating profit decline as an alternative indicator of economic hardship. We collect ESG performance (ratings) data from Korea Corporate Governance System (KCGS) from 2011 to 2020.
 [Findings] We find that the positive value effect of ESG performance is weaker for firms that experience such shocks. Furthermore, during the COVID-19 pandemic, the effect of enhancing the value of ESG performance is not observed. Our results are robust to controlling for potential endogeneity of ESG performance using the two-stage least squares (2SLS) approach.
 [Implications] Our findings suggest that the beneficial effects of ESG performance on long -term corporate value is attenuated when firms face economic difficulties and severe economic crisis.

The Mediating Effect of Commitment to Organizational Change on the Relationships Among Innovative Work Behavior, Organizational learning Orientation and Informal Learning Activities of Office Workers at Large Corporations in Korea

The Mediating Effect of Commitment to Organizational Change on the Relationships Among Innovative Work Behavior, Organizational learning Orientation and Informal Learning Activities of Office Workers at Large Corporations in Korea

The relationship between green innovation and sustainable growth in Korean companies: Moderated mediation effect of ESG score by industry

AbstractSustainable development of companies is emphasized by many asset management companies around the world as an investment decision criterion. So, the most important issue in business management is Environment, Social, and Governance (ESG). But, criticism of ESG has been raised and some studies have found the impact of green innovation and ESG on financial performance to be inconclusive or inconsistent. At this point, this study reviewed ESG‐related researches and examined the relationship between green innovation, ESG, and sustainable growth. By analyzing the mediating effect of ESG score, this study examined whether investment for green innovation directly affects corporate sustainable growth or indirectly affects it through ESG score, an external evaluation. In addition, a moderating variable was added to see if this relationship varies by industry. For this research purpose, the moderated mediation effect analysis using PROCESS macro was conducted in‐depth. Companies received ESG evaluation by Korea Corporate Governance Service were selected as a sample. The results of this study will provide many implications for companies that are driving ESG.

회계법인 특성이 피감사기업의 자기자본비용에 미치는 영향

[Purpose]This study examines how the proportion of audit firms’ audit revenue affects the cost of equity capital of audited firms.
 [Methodology]In this paper, regression analysis is performed based on a Korean sample of 301 observations between the years 2019 and 2020, when the standard audit hours policy was introduced under the revised Act on External Audit of stock companies.
 [Findings]This study shows that the higher the ratio of audit revenue to the total sales of audit firms’, the lower the cost of equity capital of the audited firms. This result suggests that when the proportion of audit sales of an audit firm is high, the firm’s cost of equity capital is reduced by accumulating related experiences by focusing on audit service, and improving the quality and reliability of the audited firm’s financial reporting. Specifically, the result is found firms with higher largest shareholder ownership, lower foreign investor equity, and lower governance score of the Korea Corporate Governance Service (KCGS).
 [Implications]Unlike most of the literature that considers the size of audit firms as the main characteristic of auditors, this study has a major contribution in that it empirically analyzes the correlation between various characteristics such as the sales structure of audit firms and the cost of equity capital. Furthermore, it provides practical implications that the audited firm should consider the auditor’s financial characteristics, such as sales structure, as well as the reputation and size of the audit firm in a situation where the audit fee burden of listed firms is increasing.

The Effects of ESG Performance on the Relationship between Tax Risk and Cost of Capital: An Empirical Analysis of Korean Multinational Corporations

Purpose - Using a sample of Korean multinational corporations, we examine whether the relationship between tax risk and the implied cost of capital discriminates between the environmental, social, and corporate governance (ESG) of highly rated firms.
 Design/methodology - Firms with high tax risks have an increased uncertainty of future cash flows. Therefore, as the volatility of future cash flow increases, information asymmetry and the required return increases. Highly rated ESG firms can reduce information asymmetry, thereby weakening the positive relationship between tax risk and cost of capital. We employ the standard deviation of the cash effective tax rate as proxy of tax risk. We utilize the ESG rating data of the Korea Corporate Governance Service (KCGS). We use a PEG model, MPEG model, and GM model to measure the implied cost of capital.
 Findings - We find a positive association between the implied cost of capital and tax risk. The positive relationship between tax risk and the implied cost of capital weakens in highly rated ESG firms. Highly rated ESG firms prefer a stable tax position to invest after-tax cash flows into sustainable management. Therefore, the negative effects of tax risk on cost of capital can be reduced.
 Originality/value - This study provides empirical evidence that ESG activities can mitigate the negative impact of tax risk on the cost of capital for Korean multinational corporations. In a business environment where ESG activities are more important, the empirical results that ESG activities can reduce the corporate risk of Korean FDI companies are expected to provide implications for the ESG activities of multinational corporations.

‘4세대 걸그룹의 걸 크러시 스타일’에 관한 연구

Girl crush is defined as a woman's desire to cheer and actively support women, such a phenomenon, or a strong affinity to see a wonderful woman. Recently, girl crush has become a remarkable cultural phenomenon and has emerged as a strong trend in girl group style, establishing itself as one of the popular culture strategies that draw their likes through women's tastes. This study aims to analyze the characteristics of the girl crush style of the 4th generation girl group, and the research method collected and analyzed data through previous studies, professional books, and SNS articles. Based on the brand reputation index of the girl group reputation report analyzed by the Korea Corporate Reputation Institute from January to July 2022, the data were compiled and selected from 1st to 50th, and 16 fourth-generation girl groups included in the ranking were selected as the final subjects. The study found that the girl crush styles of the fourth-generation girl groups were punk style, athletic style, military style, school girl style, futurist style, and goth style. In addition, the girl crush style is largely divided into girl crush and teen crush, and it is expressed in the style of a free-spirited girl and a strong and confident woman who visits the self according to music concepts and strategies within each style type.

경영자의 자기과신성향이 ESG 평가정보에 미치는 영향

[Purpose] The purpose of this study is to investigate the relationship between the ESG evaluation information of the Korea Corporate Governance Service and the CEO’s overconfidence tendency, which is a representative characteristic mentioned when referring to the manager’s personal characteristics.
 [Methodology] The dependent variables of the model were ESG evaluation grade(integration, environment, society, governance), and independent variables were CEO’s overconfidence variables, and the residual analyzed as total asset growth and sales growth. The study sample performed a regression analysis with 2,646 companies.
 [Findings] There is a contradiction between the CEO’s self－confidence tendency and the ESG evaluation grade(ESG environmental and ESG governance). As a result of analyzing companies with positive (＋) and negative (－) overconfidence of CEO, it is shown that the difference in overconfidence of managers has little effect on ESG grade. And as a result of the analysis using the CEO’s overconfidence tendency dummy variable, only the CEO’s overconfidence tendency dummy, ESG environmental, and social grade show a negative (－) correlation.
 [Implications] This study is meaningful in that it investigated the relationship between CEO’s overconfidence tendency, one of the main characteristics of CEO, using ESG evaluation, a non－financial factor, in addition to financial factors for sustainable management.

Developing ESG Evaluation Guidelines for the Tourism Sector: With a Focus on the Hotel Industry

This study aimed to develop an ESG evaluation index that accurately captures the features of the hotel industry. To create the ESG evaluation index for the hotel industry, the K-ESG guidelines provided by Korea Corporate Governance Service (KCGS) were utilized as a benchmark, and also, the Korea Tourism Organization’s ESG-compliant standards for certification evaluation were taken into consideration to reflect the particulars of the hotel business as closely as possible. The initial measurement items for an ESG evaluation index were created by reviewing prior research, and they were modified and supplemented based on the results of the Delphi survey. The professionals currently engaging in business, academia, and governmental institutions, whose knowledge and expertise are specialized in the hotel industry, participated as panel members in the study. In the first round, the panel members were encouraged to brainstorm and answer the questionnaire consisting of both open- and close-ended questions. In the second round, the panel members were asked to respond to a questionnaire made up of closed questions extracted from the first round. Through both rounds, the ESG evaluation index for the hotel industry was finalized, including three domains, twenty indicators, and forty-on items. To fulfill the purpose of the study, which was to initially develop an ESG evaluation index applicable to the Korean hotel industry, this study was conducted toward the professionals in the field. This opens up interesting possibilities for more investigation. The range of participants can be widened by incorporating hotel personnel and patrons, ensuring that the ESG evaluation guidelines are specifically applicable to the hotel industry. Additionally, it appears essential to broaden the research’s focus to include the tourism industry as a whole.

ESG가 경영효율성에 미치는 영향: 기업규모의 조절효과를 중심으로

As the economy and society grow and environmental pollution and social problems emerge, firm’s interest in ESG and sustainable management is increasing. Against this background, corporates are making efforts to disclose their ESG activities, and the government is moving to establish standards and obligations for corporate ESG disclosure. In order to give justification to ESG activities, academia is conducting research to reveal the effect of ESG activities on performance. Therefore, this study analyzed the effect of ESG on management efficiency. For this, the ESG grade of the Korea Corporate Governance Service, DEA, and Tobit regression were used. As a result of the analysis, it was found that the higher the ESG grade, the lower the management efficiency. This negative (-) relationship was moderated in the positive (+) direction as the firm size increased. This means that ESG activities can be negative in terms of efficiency. It also indicates that the impact of ESG may vary depending on the characteristics of the corporate. This study has academic implication in that it extends ESG-related research to the aspect of efficiency. In addition, it has practical implications that factors to consider are provided to policy makers and corporate decision makers.

Informal Networks, Informal Institutions, and Social Exclusion in the Workplace: Insights from Subsidiaries of Multinational Corporations in Korea

Drawing on interviews with decision makers in multinational corporations (MNCs) in South Korea, we examine the role of informal networks in the social exclusion of women in the workforce. Although legislation in the country is in favor of gender equality, we found that informal barriers in the workplace remain difficult to overcome. Informal networks in Korea, yongo, present an ethical issue in the workplace, as they tend to socially exclude women, limiting possibilities for their participation and career progression. We found that informal networks are pervasive and strong because of the informal institutions in which they are embedded and that there is a complex interplay between informal networks and informal institutions that socially excludes women. Due to difficulties accessing yongo, women appear to build inmaek, a network type that is more open and accessible. We also found that MNCs in Korea can compensate for the lack of local informal networks for their female employees. However, despite providing a more supportive environment for women at work, gender equality policies in MNCs are not yet as effective as they could be due to the dynamics of the workplace and the fact that the policies are not tailored to the local context. We have seen evidence in recent years that MNCs can serve as role models for implementing gender equality policies by creating a more inclusive work environment and demonstrating leadership commitment and support.

ESG and Managerial Agency Problems

Criticism of conventional shareholder supremacy triggered urges for incorporating the stakeholder perspective and the Environmental(E), Social(S) and Governance(G) issues in managerial decisions. However, the corporations in Korea still lack proper corporate governance to protect shareholder benefits from managerial agency problems. In that case, adopting vague, not readily assessable objectives may lead to a lack of managerial accountability and exacerbate the agency problem. We find that Tobin’s Q of firms without good governance declined when their environmental and social ratings improved, suggesting “E,” “S,” and “G” are not independent. Corporations should prioritize establishing

코로나19 위기 상황에서 기업규모에 따른ESG 경영활동과 주가 변동 간 영향 관계 연구

[Purpose] This study aims to demonstrate and provide implications for the influence relationship between ESG management activities and stock price fluctuations of companies in 2020, which showed rapid volatility in the capital market due to the COVID-19 crisis.
 [Methodology] In this study, the level of ESG management was indexed with the Korea Corporate Governance Institute’s 2020 ESG rating. Stock price fluctuations were measured by the quarterly return on shares of each company. To confirm the difference according to the company size, the analysis was also performed by dividing into large, medium, and small caps.
 [Findings] This study confirmed that the level of ESG management activity is in a positive relationship with stock price fluctuations depending on the direction and intensity of the capital market fluctuations during all the year of 2020 as well as the first quarter of 2020, and that the influence relationship varies depending on the size of the company.
 [Implications] Prior research until recently has focused on the short period of recovery from the initial stage of the COVID-19 pandemic. This study demonstrated the relationship between ESG management and stock price fluctuations by company size during all the year 2020.

The Effects of Earnings Management, Related Party Transactions and ESG Management of Chaebol Firms on Corporate Performance in Korea

Purpose - This study investigates the effects of earnings management, related party transactions between chaebol affiliates on earnings management and ESG score on their profitability using return on assets (ROA). Design/Methodology/Approach - We use data including ESG (Environmental, Social, and Corporate Governance) score of the Korea Corporate Governance Service(KCGS), and financial data of 10,145 firm-year observations from the Total Solution 2000 (TS 2000) and Korea Companies-Information Service (KOKOInfo), and apply the finite lagged models to investigate the long-term effects of related party transactions between chaebol affiliates of earnings management on ESG scores and corporate performance. Furthermore, to take into consideration the simultaneous mutual effects on each other of main variables, we introduce finite distributed lags of five years. Findings - First, ESG-rated firms have a higher total asset return than non-ESG-rated firms. Second, chaebol firms have a higher profitability than non-chaebol firms. Third, profit management of related party transactions between affiliates within a chaebol has a positive effect on the short-term profitability and a negative effect on the long-term profitability. Fourth, chaebol ESG firms have a lower impact on profitability due to rating up (down) than non-chaebol ESG firms. Research Implications or Originality - Based on the above results, it can be concluded that firms used related party transactions for earnings management, the effects of related party transactions change over time, and chaebol firms manipulate earnings through related party transactions and ESG scores.

Tax Avoidance, Tax Risk, and Corporate Governance: Evidence from Korea

This study examines the association between the effective corporate tax rate and the volatility of future effective corporate tax rates in Korean companies. We analyzed the effect of corporate governance on the association between tax avoidance and tax risk. Our sample is comprised of all the firms listed on the Korea Composite Stock Price Index market. We measure each firm’s tax avoidance as GAAP ETR, Cash ETR, and BTD, and use the corporate governance rating of the Korea Corporate Governance Service to measure corporate governance. Our results show that the volatility of the effective corporate tax rate and the effective corporate tax rate would have a significant negative association. Our results show that tax risk decreases when the corporate tax avoidance level increases and the tax risk increases when the corporate tax avoidance level decreases. In addition, we find that the better the corporate governance structure, the higher the level of supervision and control of managers, thereby mitigating the impact of tax evasion on future corporate tax risk. The findings of this study regarding tax avoidance and corporate governance are important for investors because tax risk can significantly affect investor welfare.