The Journal of Economics, Marketing and Management (융합경영연구)

International Convergence Management Association (국제융합경영학회)
권호 표지
DOI QR코드

DOI QR Code

Impacts of Financial Constraints on Firm Value for KONEX Listed Firms

  • Zhang, Xue Dong (Seoul National University of Science and Technology) ;
  • Kang, Shinae (Seoul National University of Science and Technology)
  • Received : 2021.06.04
  • Accepted : 2021.08.30
  • Published : 2021.08.30
Download PDF
⟨ Previous Next ⟩

Abstract

Purpose: This study empirically investigates what factors contribute to corporate value in the Korea New Exchange (KONEX) market and determines whether financial constraints contribute any effect on it. Research design, data and methodology: A fixed-effect panel regression model was utilized to analyze financial constraints on firm value for KONEX listed firms through the fiscal period from 2013 to 2020. Results: we find that firms' research and development, volatility, size, and sales growth give significant impacts to firm value, but the significance and direction are different. In addition, no significant relationship exists between the largest shareholder's equity ratio and firm value in all models. The debt-to-equity ratio did not show a significant relationship with corporate value. A significant negative relationship was found between R&D and corporate value in the entire sample. Volitility exhibited a positive relationship with corporate value in the entire sample and financially unconstrained companies. Firm size presented a significant negative relationship with company value in all models. Sales growth showed a significant negative relationship with corporate value in financially constrained companies. Conclusions: No difference is found between financially constrained and unconstrained companies in the KONEX market. We can infer that KONEX companies have a large difference with KOSPI or KOSDAQ. Further analysis is needed on the differences among these markets.

Keywords

Acknowledgement

This research was supported by the resesech program funded by the SeoulTech(Seoul National University of Science and Technology).

References

  1. Beck, T., Emirguc-Kunt, A., & Maksimovic, V. (2005). Financial and Legal Constraints to Growth: Does Firm Size Matter?, The Journal of Finance, 60(1), 137-177. https://doi.org/10.1111/j.1540-6261.2005.00727.x
  2. Choi S. B. (2019). A Study on the Survival Rate of Konex-listed Firms and Its Financial Determinants, Korean Review of Corporate Management, 10(1), 177-197 https://doi.org/10.20434/KRICM.2019.02.10.1.177
  3. Han J. H. (2008). Cash Holdings and Financial Constraints: Evidence from Korean Manufacturers, 23, Journal of Korean Economy Studies, 13, 205-235
  4. Hwang S. S. (2017). The Review on the History and Vitalization of the KONEX(Korea New Exchange) Market, The Review of Business History, 82, 75-96 https://doi.org/10.22629/kabh.2017.32.2.004
  5. Jang W. L.,,Hong J. B., & Jeong H. J. (2014). Vitalizing KONEX through Reducing Informational Asymmetry, Korean Journal of Financial Studies, 43(1), 305-325
  6. Kang S. A. (2019) Influences of Financial Constraints on Firm Value: focusing on KZ index, Korea Tax Research, 19(2), 105-125
  7. Kang S. A., & Min S. K. (2010). The Relationship between Foreign Stock Ownership and Firm Value in the Korean Stock Market, International Business Journal, 21(1), 29-57
  8. Kaplan, S. & Zingales, L. (1997). Do investment cash flow sensitivities provide why investment is correlated with cash flow?, Quarterly Journal of Economics, 112,.169-215. https://doi.org/10.1162/003355397555163
  9. Kim B. H. (2017). The Association Between Unexpected Changes in Corporate Cash Holdings and The Value of the Firms Listed in Korean Stock Market In Time of Financial Crisis, in Terms of Financial Constraint and Corporate Governance, Korea Journal of Business Administration, 30(3), 391-416
  10. Kim G. S. (2013). A Study on the Revitalization of the KONEX in Korea, GNU Law Review, 21(4), 177-199
  11. Kim M. A., & Woo M. C. (2017) Regulation Changes to Boost KONEX: Effects and Implications, Asia-Pacific Journal of Business Venturing and Entrepreneurship (APJBVE), 12(3), 191-202 https://doi.org/10.16972/APJBVE.12.3.201706.191
  12. Kim M. T., & Lee S. H. (2016). Study of Determinants of Initial Public Offerings(IPOs) in the KONEX market, Korea International Accounting Review,66, 335-354 https://doi.org/10.21073/kiar.2016..66.014
  13. Kim M. T., & Ma S. S. (2016). A Study on Earnings Management in the KONEX, Korean Accounting Journal, 25(2), 511-533
  14. Kim Y. D. (2012). Challenges for successful introduction of KONEX market, Weekly Financial Report, KIF, 21(13), 12-13
  15. Lee B. J., & Kim D. C. (2017). The Effect of Financial Constraints on Stock Returns in Korea, Asian Review of Financial Research, 30(4), 395-432 https://doi.org/10.37197/arfr.2017.30.4.1
  16. Lee C. H., & Byun J. C. (2017). A Positive Side of Financial Constraints in Cash Management, Korean journal of financial management, 34(2), 113-141 https://doi.org/10.22510/kjofm.2017.34.2.005
  17. Lee J. H., Kim S. H. & Joung A. R. (2019), The Effect of the Nominated Adviser on the Corporate Earnings Management in the Konex Market, Accounting Information Review,37(1), 263-286 https://doi.org/10.29189/kaiaair.37.1.10
  18. Lee K. S., & Chung H. C. (2021). A Study on the Relationship Between Investor Recognition and Firm Value: Based on the Effect of Switching of Stock Listing from KONEX to KOSDAQ Market, Korea Business Review, 50(2), 383-404
  19. Ra Y. S., & Lee Y. G. (2012) Influences of Financial Constraints on Corporate Financial Structure, Korea Journal of Business Administration, 25(3), 1439-1460
  20. Shin M. S., & Kim S. E. (2008). The Relations between Financial Constraints and Adjustment Speed of Capital Structure, Journal of Industrial Economics and Business, 21(4), 1543-1568
  21. Shin S. H., & Yi Y. (2017). An Empirical Study on Earnings Management in KONEX, The Journal of International Trade & Commerce,13(2), 535-549