Korean Startups Research Articles

A study of the influence of family involvement on the IPO performance of Korean start-ups

ABSTRACT This study examines what types of abilities of the top management team influence the market value at initial public offering (IPO) and especially focuses on how family involvement influences the effect of top management on the market value at IPO. As a result, first, the more top managers with the output function background or the relevant industry experience the top management team has, the higher the market value at IPO is. Second, the more family members participate on the board of directors, the stronger the impact of the top management team’s output function background or relevant industry experience on the market value at IPO.

폐배터리 재활용 스타트업의 가치평가

Whilst the recent downward movement in venture capital market, venture investment in disruptive innovation technology has steadily increased. Amongst the rechargeable battery industry, in which Korean companies have secured global comparative advantages, is expected to show abnormal growth for the next several years. To pursue sustainable growth under the government’s strategic support and environmental regulations, it is necessary to establish a battery circular economy. Collecting and recycling used batteries is a key element of the battery circular economy that could stabilize supply chain and resolve the environmental issues. This case study analyzes Redwood Materials Inc., an U.S. firm specialized in battery recycling, and discuss how to estimate the firm value. Through the case analysis, we can understand the recent trends in the rechargeable battery and recycle industries in the U.S. and discuss the strategic directions of Korean battery firms. In addition, the analysis on the growth of an U.S. startup will help readers to discuss the role of venture capital in nurturing Korean startups to become global companies.

Developing A Star-Up Business From A Management And Financial Perspective For Indonesian Workers In Korea

Many Indonesian citizens seek opportunities abroad, including becoming Indonesian workers in various countries, notably in South Korea. This phenomenon is further fueled by the global popularity of the Korean wave, attracting both Indonesian workers and students to Korea. With a significant proportion of Indonesia's population falling within the productive age range (15-64 years), there is a growing demand for diverse job opportunities. The recent boom in startup businesses, driven by technological advancements and government support, has provided a promising avenue for addressing these economic challenges. South Korea, known for its rapid technological development, offers an ideal environment for Indonesian workers in Korea to venture into startups. However, navigating the complexities of the Korean startup landscape, including fierce competition and intricate regulations, presents its own set of challenges. Building a robust network, understanding local regulations, and focusing on effective management and financial planning are essential for success. This community service initiative, conducted by IBI Kosgoro 1957 and the Indonesian Ambassador in Korea in collaboration with Kaya University and Busan University, aims to enhance the knowledge of Indonesian workers in Korea in the areas of startup business development, management, and finance. Through interactive seminars, discussions, and ongoing evaluations, this initiative seeks to empower Indonesian workers with the skills and insights needed to thrive in the competitive Korean market. The results and discussions from this initiative emphasize the importance of effective marketing strategies tailored to the Korean market, the significance of financial management in startup success, and the potential for Indonesian workers in Korea to build successful businesses by leveraging their unique experiences and networks. In conclusion, developing startup businesses in South Korea as Indonesian workers entails thorough market research, strong business planning, capable management teams, sound financial management, tailored marketing strategies, and adaptability. By effectively implementing these factors, Indonesian workers in Korea can enhance their prospects of establishing and growing successful startups in a competitive environment.

국내 창업생태계 활성화를 위한 인적자원 육성전략에 대한 탐색적 연구

This phenomenon is expected to accelerate further as global corporate value has recently highlighted the importance of human resources to plan, execute, evaluate and feedback on the business model and model held by the company rather than the size of real assets. The purpose of this study is to provide suggestions by analyzing the current status of prior research and policies related to fostering human resources among the factors that vitalize Korean startup ecosystem.
 An IPA survey was conducted by deriving a total of 16 human resource development strategies through PEST-SWOT analysis and Delphi survey. For 18 days from May 29 to June 16, 2023, an online survey was conducted on prospective entrepreneurs, entrepreneurs, and start-ups who are members of the start-up ecosystem, and a total of 215 people responded.
 IPA analysis shows that the average score is high in order of importance (4.60), difficulty (3.57), achievement (3.04), which is important for 16 strategies by start-up ecosystem members, but it has not played much role in terms of performance so far.
 In addition, as a result of the IPA analysis, three core human resource development strategies and four human resource development strategies that should focus on are presented as follows : [OP] Expanding policies to foster local human resources to revitalize local base-based start-ups, [TT] Support for startup technology protection to defend against threats of core technology and talent capture, strengthening support for human resource development and education support, [SP] Development of human resource development policies to manage the effectiveness and efficiency of university start-up infrastructure and start-up education, [TS] Strengthening support for hiring and fostering key talent of prospective unicorn companies to strengthen and defend global technology hegemony, [ST] Expansion of human resources to support innovation and start-ups in new industries, [WP] Development of related research support policies such as human resources status and fostering measures in the start-up ecosystem in connection with the Korean version of the New Deal (2021-2025), [OS] Expanding Human Resources Development for Digital-Based Start-up Support.

한국 창업 기업의 ESG 경영과 SCM 파트너십이 기업이미지와 기업성과에 미치는 영향에 관한 연구

한국 창업 기업의 ESG 경영과 SCM 파트너십이 기업이미지와 기업성과에 미치는 영향에 관한 연구

Navigating a crisis: do exploration and exploitation help SMEs when they respond to COVID-19 disruption?

ABSTRACT This study investigates the validity of exploitation and exploration when small- and medium-sized enterprises (SMEs) navigate a highly uncertain time. Although balancing the two strategies has been thought to lead to improved firm performance in general, a combined approach appears to be problematic for SMEs due to a lack of feasibility. We theorise that the effectiveness may vary depending on a fit between the strategies and the environmental contingencies. In doing so, we considered two potential environmental contingencies of a crisis for SMEs: loss of demand and loss of supply. To put our theory to the test, we gathered 224 responses from business leaders and key individuals from Korean start-ups and tested the effectiveness of crisis management strategies. Our findings support the validity of both exploitation and exploration when firms face a loss of demand, but not a loss of supply. It implies that the effectiveness of exploration and exploitation is contingent upon a specific form of crisis experienced at the firm level.

Never have a crisis like COVID-19

Current circumstances caused by COVID-19 pandemic pose a unique challenge to businesses. How could businesses survive? What strategic options do businesses have when they effectively engage such a challenge? Delving into the inquiry, we explore and investigate different strategic approaches to measure their effectiveness. For the study’s explorative and investigative purposes, our investigation involves a set of tests at both business and corporate levels. Using 224 responses from the leaders and key individuals of Korean startups, we tested the effectiveness of strategic options using the notion of ambidexterity and alliances, and mergers and acquisitions. Using the ambidexterity lens, we found exploitation and exploration indirectly affect firm performances and are still effective under COVID-19. We also found “reinforcing the relationship with existing alliances,” a corporate-level approach, to be effective.

The Effect of Learning Orientation and Business Model Innovation on Entrepreneurial Performance: Focused on South Korean Start-Up Companies

The purpose of this study is to empirically confirm the importance of learning orientation in the operation of start-up companies. In the literature, it is well known that this learning orientation plays a big role in improving the performance of start-ups by cultivating organizational members’ capabilities in detail, encouraging active learning, and creating new knowledge. To this end, a business model innovation framework for start-ups was established by empirically validating the theoretical research model. For the analysis, 139 questionnaires from start-ups with less than 7 years of business history in the incubation center were used. For the novelty of this work, it investigates the causal relationship between the learning orientation of start-ups, business model innovation, and start-up performance (technology acquisition and market expansion). Our research has contributed to the literature on entrepreneurship, innovation and strategy as follows. First, it contributed to the literature on entrepreneurship by redefining the performance of start-up companies as technology acquisition and market expansion through a review of previous studies and providing insight into the importance of learning orientation for start-ups through empirical studies. Second, it contributed to the innovation literature by confirming the importance of business model innovation for start-ups to achieve start-up performance through empirical research. Third, it contributed to the strategic literature by presenting and empirically confirming business model innovation through learning-orientation improvement as a way to achieve the performance of start-up companies.

Crisis Management Strategies of Startups in the COVID-19 Pandemic

The survival and growth of entrepreneurial startups system are threatened by the unprecedented exogenous shock of the COVID-19 pandemic. While startups play pivotal roles in a country’s national innovation system, “what, why, and how” they act against the crisis has remained an underexplored topic. This study aims at identifying specific government policy initiatives to protect the firms’ survival during the crisis and counterstrategies employed by startups in the crisis management processes. Our quantitative analysis of 91 policy initiatives in 40 countries against the COVID-19 economic crisis indicates that governments focus mainly on providing short-term financial supports such as interest/tax benefits, payment delays, and wage subsidies for small and medium-sized enterprises. In contrast, startup-specific supports buffering from the lack of investment and financial capital were insufficient. Another qualitative analysis of interviews with 16 actors in entrepreneurial ecosystems reveals that Korean startups are leveraging the productive utilization of available resources through business model improvements, organizational restructuring, and external networks against the high illiquidity caused by the crisis. Startups are also required to remain resilient in the entrepreneurial crisis management process by adopting bricolage responses allowing high agility and adaptability for seeking alternative business opportunities in times of crisis.

Innovation Capabilities and the Performance of Start-Ups in Korea: The Role of Government Support Policies

What kind of capacity is needed to improve the performance of start-ups? How effective are government support policies in improving start-up performance? Start-ups are critical firm group for ensuring the prospective and sustainable growth of an economy, and thus many countries’ governments have established support policies and they are likely to engage more widely in forward-looking political support activities to ensure further growth and expansion. In this paper, the effect of innovation capabilities and government support policies on start-up performance is examined. We used an unbalanced panel data analysis with a random effect generalized least squares. We investigated the effect of government support policies on 4368 Korean start-ups. The findings indicated that technology and knowledge capabilities had positive effects on the sales performance of start-ups, and government financial support positively affected the relationship between knowledge capability and firm performance. However, when government financial support increased, marketing capability was negatively associated with firm performance. These results demonstrate the significant role of government financial support, including its crowding in but also its crowding out effect. Practical implications: To be more effective, governments should employ innovation-driven entrepreneurship policy approaches to support start-ups. To improve their performance, start-ups need to increase their technology and knowledge capabilities. This study extends recent efforts to understand more fully the effect of government support policies on start-ups differing in their technology, knowledge, and marketing capabilities.

The invisible supporters

Abstract This article examines how written feedback is used to support the production of texts for purposes of reuse. The case study refers to an entrepreneur training program at the University of Texas at Austin. In the program, Korean startups are trained in understanding the US market, and developing pitches that convince US investors. They are supported by Quicklook® reports. A Quicklook report delivers snapshots of the market receptivity for the startup’s product. Market analysts write the reports. In the final stage of drafting, program staff members supervise the report author. This study investigates how supervisors use commenting and how the goal of creating a highly reusable text source guides the feedback process. The database was examined quantitatively (frequency of drafting and commenting) and qualitatively (functional comment types). The results offer valuable insights into actual writing processes in business settings and how professionals interact to ensure a reusable product. The findings indicate a broad range of comment functions. Overall, we distinguish two main categories: feedback activities focusing on Quicklook reports as reusable resource, and feedback activities focusing on collaboration and workflow. Each category includes functional comment types. Further research is needed to learn more about professional strategies of reflecting on text quality, the quality of assessments, or the ratio between detected and real deficiencies of a document.

Teasing Humor and Identity Construction in Business Meetings at a Korean Startup

Teasing Humor and Identity Construction in Business Meetings at a Korean Startup

Sustainable Profit versus Unsustainable Growth: Are Venture Capital Investments and Governmental Support Medicines or Poisons?

Considering that startups greatly contribute to the economic development and survival of a country through economic growth and job creation, it is necessary to investigate the profitability of startups. However, research on this issue has not been developed enough as most previous studies regarding firm profitability were based on large-scale public companies with relatively easy data accessibility, not on startups. In addition, it is meaningful to empirically prove whether venture capital investments and governmental support positively impact on the sustainability of startups as huge discrepancies exist between traditional academic research and recent practices. Findings from this study, based on data analytics, are expected to fill the gap in knowledge as it is not clearly known about firm profitability of startups for their sustainable growth and survival. Focusing on startup profitability, the main objective of this research is to provide significant theoretical contributions and practical guidelines for startup entrepreneurs, investors, and policymakers to avoid unsubstantial growth and find solutions for sustainable growth and survival. To properly and completely analyze the determinants of firm profitability of startups, this research used the 2018 and 2019 Survey of Korean Startups by the Ministry of SMEs and Startups of Korea and Korea Venture Business Association with over 3000 samples.

The Digital Economy in Southeast and South Asia: Towards Mutually Beneficial Cooperation with Korea

Southeast and South Asian countries are actively promoting digital economy policies and strategies. They have a great potential in the digital economy: they generally maintain high economic growth rates, have large markets, young population, and decent ICT utilization levels, etc. The conditions for trade investment are also being improved. Though there are deviations between countries, they have strong incentives to promote digital innovation in order to achieve the qualitative advancement of industries and economy as a whole. Moreover, some countries already possess great competitiveness in digital innovation. Demands related to the digital economy are expected to grow in Southeast and South Asian countries. For example, these nations are undergoing rapid urbanization and experiencing a sharp increase in demand for electricity supply, logistics, finances, etc. with the combination of digitalization. Some countries are struggling with a lack of digital skills and technologies, and looking for cooperation with external partners. Korea is a potentially intimate partner that can contribute to substantial leapfrogging in Southeast and South Asian countries. Korea, in terms of both businesses and government policy (the New Southern Policy), is now trying to diversify its areas of cooperation with these countries beyond the manufacturing sectors. Geographic and cultural proximity, as well as the various bilateral economic relationships already established, is the foundation for cooperation in the digital economy. Because the digital economy bears relation to society and culture as well as economic and industrial areas, cooperation in the field of the digital economy can supplement the typical pattern of relationships between Korea and South East and South Asian economies, mainly centered in manufacturing production networks. Korea and Southeast and South Asian countries need to establish a comprehensive cooperation platform. Through this, they can inform partners about their various agenda and interests in digital economy-related areas and discuss ways for cooperation. Innovative small businesses and start-ups should be the focus of cooperation. Korean start-ups are now showing an increasing amount of interest in Southeast Asia. Meanwhile, Southeast and South Asian countries are keen to welcome foreign start-ups and professionals that possess innovative digital technologies and business models. Korea also has to actively participate in multilateral cooperation initiatives covering Southeast and South Asia.

The Effects of Exports by Small Firms on Their Credit Ratings, Bank Loans and Bank Loan Costs in Korea

Purpose - We investigate the effects of exports by very small Korean startup firms with their initial asset size around 1 or 2 million US dollars, in comparison with non-start ups, on their credit ratings, bank loans and bank loan costs. Design/methodology/approach - We use 51,580 observations of 11,293 firms provided by KIS-Value data base from 2009 to 2015 and apply fixed effects panel regression models. Findings - Findings are as follows. First, new startups have higher credit ratings by 0.0527 in the 1- 15 grade range, compared with non-startups. However their bank loans are higher by 0.019 percentage points while their bank loan costs are 0.0446% percentage points lower than non-startups. Second, exports by startups have a negative effect on credit ratings, lowering such ratings by 0.180 grade points compared with non-startups. However, exports by startups increase their financing through bank loans by 1.12% percentage points and decrease their borrowing costs by 0.570% percentage points than non-startups, per one percent increase in exports. For small firms as a whole, exports show similar results in credit ratings, bank loans and financing costs. Research implications or Originality - The results suggest that corporate performance in exports provide a negative signal in credit rating for small startups. Small startups effectively finance funds at a lower cost for at least the first three years after their establishment.

신남방지역 디지털경제 협력방안 (The Digital Economy in ASEAN and India: Policy Implications for Korea)

신남방지역 디지털경제 협력방안 (The Digital Economy in ASEAN and India: Policy Implications for Korea)

The Success Factors of Korean Global Start-Ups in the Digital Sectors Through Internationalization

With the growing importance of start-ups in building a sustainable national economy, both the Korean government and scholars are demonstrating growing interest in strengthening the competitiveness of start-ups. The Korean government has promoted a number of initiatives, but there are also a growing number of critics who argue that government regulations are obstacles to the efficient operation of start-ups and their competitiveness enhancement. Many of the preceding studies on Korean start-ups have emphasized the critical factors of survival and growth, including entrepreneurship, innovation, and technology. However, these factors do not guarantee market success. In addition to technological capabilities, a good set of strategies are needed. This paper investigates how Korean global start-ups scale-up their businesses and gain success through global strategy. Specifically, this paper adopts the ABCD model and global value chain strategy to analyze the success factors of fast-growing Korean start-ups that operate in the ASEAN digital sectors. This paper argues that the growth of Korean digital start-ups through internationalization has not been directly accelerated by government support but rather to avoid government regulations. Moreover, the four strategic factors of the ABCD model facilitated their entry and success in the ASEAN market by developing a cooperative relationship with local firms for efficient operations on a cross-border network.

Business Sustainability of Start-Ups Based on Government Support: An Empirical Study of Korean Start-Ups

Since the mid-2000s, start-ups have increasingly become the driving force of new jobs and growth engines for advanced countries, and emerging nations are striving to vitalize start-ups through active government support policies. However, approximately 30% of start-ups shut down within two years of their foundation. Accordingly, this study determines the factors affecting the business sustainability of start-ups as based on available government support and provides suggestions to increase the effectiveness of the government-supported projects. This study conducted a survey of 273 start-ups in Korea, and empirically analyzed whether factors such as entrepreneurship, market orientation, and network affected business sustainability by using flow experience and entrepreneurial satisfaction as mediators. The results found that entrepreneurship affected business sustainability with flow experience and entrepreneurial satisfaction as the mediators, while market orientation affected business sustainability using flow experience as the mediator, and network affected business sustainability with entrepreneurial satisfaction as the mediator.

Understanding the accelerator from resources-based perspective

Purpose This study aims to explore Accelerators and their practices in sustaining start-ups within their innovative programs for these companies based on the resource-based perspective. Moreover, with an ever-increasing demand for Accelerators amongst start-up companies, this study also demonstrates the importance of Accelerators, as it pertains to new venture creation. Design/methodology/approach This research uses an exploratory case study approach to examine a comparative view of leading Accelerator companies in the USA and Korea based on resource support. Findings The results of this study show that there are a number of differences between Accelerators of the two countries in terms of the resources they support for early-stage start-ups. The findings also show some similarities. However, in Korea, the Accelerator landscape is limited, where mentorship, resources and investments are not readily accessible, resulting in low success rates for Korean start-up companies. These limitations have had a negative trickle-down effect when providing entrepreneurs with strong access to resources and investors, which highly affects the success rates of early-stage start-ups. Practical implications In terms of the resource-based theory, this study contributes to the growth of early start-ups by emphasizing the role of the accelerator and suggesting the extent and impact that entrepreneurs have access to resources and investors. Originality/value With significant growth in start-ups around the world, the necessity for start-up funding and mentorship has increased drastically. Start-up companies need various types of assets, systems, knowledge and information to achieve their goals. In Accelerators, start-ups receive all the aforementioned resources while also improving their entrepreneurial skills. Start-up companies have many options in seeking investors who support both tangible and intangible resources to boost growth. While there is a wealth of information on traditional funding methods, there are few studies that shed light on the role of Accelerators from the resource-based point of view.

한국 스타트업 기업의 EU권과의 국제기술협력에 관한 연구 : Celtic 클러스터를 중심으로

한국 스타트업 기업의 EU권과의 국제기술협력에 관한 연구 : Celtic 클러스터를 중심으로