Information Content of Earnings for Write-Off Firms

Asset write－off has drawn the attention of researchers. Prior studies on unusual charge have focused on the market reaction to the announcement of the charge. In contrast, this paper investigates the market reaction to the earnings announcement in the following period. At this stage of research, I find strong evidence that the market reaction to the earnings announcement is asymmetric. Firms respond more positively to positive earnings surprise in the year following large write－offs.2

The Roles of the Organizational Trust and Psychological Empowerment on the Relationship between High Involvement HR System and Employee Commitment

The burgeoning literature on ways in which human resource management might lead to superior organizational performance and productivity includes reference to high commitment management, high involvement work practices, and high performance systems. While there are a number of theoretical and empirical research suggests that these management practices are not the same constructs and dimensions, a common point is the HR practices assumed causal link to organizational performance via the responses of employees. There were many attempts to identify the effectiveness of such HR system and practices, among which a few research has performed in order to improve our understanding of mediating variables inside the 'black box' of the firms. This research is aimed to reveal the mediator roles of organizational trust and psychological empowerment on the relationship between high involvement HR system and employee commitment in relations to organizational commitment and change commitment. For this purpose, 278 employees who joined any public and private organizations completed the questionnaires and LISREL was employed. The findings are: Firstly, The empirical findings of the effects of the high commitment HR system on the organizational productivity in terms of commitment to organization and change were not supported. Secondly, the mediators of organizational trust and psychological commitment were predicted from the high commitment HR system. Moreover, mediator roles of organizational trust and psychological empowerment on the relationship between high commitment HR system and organizational productivity were confirmed. Finally, some implications are included.2

The Effect of Patent Rights on the Economic Value Added(EVA) in the Case of KOSDAQ

This study examines the effect of patent rights (PAT) on the future firm value of KOSDAQ firms. The research seeks to determine whether there is a positive association between PAT and economic value added (EVA), after other intangible assets such as development cost (DEVEL), R&D expenditures (RND), advertising costs (AD), and training/education costs (TRC), and other control variables including firm performance, firm size, and debt ratios, have been considered. The test sample consists of 640 firms that were listed in the Korea Exchange between the years 2007-2010. The results of the study suggest that there is a positively significant relationship between EVA and PAT; however, in case of DEVEL, RND, AD, and TRC, no such association has been detected. This implies that, as long as the rights to patents resulting from research and development activities are guaranteed, the markets tends to view holding patent rights as future economic benefits.2

A Study of the Links Between the 3-Component of Ethical Commitment and Organizational Attractiveness

This research represents the first empirical research which applies Meyer and Allen's (1991) 3-Component Model of organizational commitment model into the ethical commitment. The findings supported our hypotheses that the ethical commitment can be empirically classified into 3 dimensionality of commitment such as affective, continuance, and normative. Furthermore, we proposed that 3-component of perceived ethical commitment influences differently on the organizational attractiveness. Empirical result shows that only perceived affective ethical commitment affects on the organizational attractiveness. Its result suggests corporate ethical activities and program should be affectively designed and implemented to enhance and encourage social responsibility of corporation. However, empirical findings indicated the links of 3-component of ethical commitment can influence on the perceived organizational attractiveness through the mediating role of ethics communication opportunity.2

The Relationship between the Level of Business Ethics and Accounting Transparency for SME and Large Company

This study examines the relationship between corporate ethical commitment index(ECI) calculated by Choi and Jung(2008) and discretionary accruals(DA) estimated by modified Jones model(1995) as accounting transparency. We assume that companies with a higher level of ethical commitment show better quality financial reporting than those with a lower level of ethical commitment. To test the hypotheses, the regression models include ECI and the absolute DA as the dependant or main independent variables to analyze both sides by ex-ante or ex-post on the basis of the year 2008. The test sample consists of 451(ex-ante) and 783(ex-post) firm-year data, selected from the KRX listed companies of 2005～2012. Consistent with our prediction, we find that companies with a higher level of ethical commitment are engaged in less earnings management. We also find that SME(small-medium enterprises) and Large Companies some produce different results for the differences of ethical perceptions with political cost hypothesis.2

전략적인 공시시간의 선택과 시장반응

The aim of this study is to analyze the timing of earnings announcement as one of the important factors influencing investors’ decision-making in the stock market. Specifically, it focuses on the question whether the management makes strategic use of the timing of earnings disclosure depending on the type of the earnings information (Good/Bad) and whether the market reaction varies according to the different timing of the announcement. The sample data covers timely disclosure of annual earnings announcement from 2002-2006. This paper employs a sample of 1,912 firm-years. When compared to the previous period, earnings increase is categorized as ‘Good News’ the opposite situation is categorized as ‘Bad News.’ In brief, the results of the research are as follows: In the category of ‘Bad News’, a clear tendency for the earnings to be announced after the market closed at 3:00 PM is revealed. This tendency appears even stronger, if the result of the present period is a loss. Also, different response for each case (Good/Bad) and its subcategory (announcement made before/after the market close) is analyzed using abnormal stock returns. In the case of ‘Bad News’ with earnings announcement after the market close, abnormal returns exhibits a diminishing tendency which begins to show from one day after the earnings announcement. In this situation, the negative market reaction is more pronounced than in the case of ‘Bad News’ with the announcement made before the market close. Furthermore, for ‘Bad News’ released after trading hours, the market reaction is even more negative when cumulative abnormal returns of nine-day window (day -3 to day + 5) surrounding earnings announcement are used. In summary, the findings show that managers make strategic use of the timing of earnings announcement to reduce the negative market reaction to bad news. Nevertheless, despite their effort, the market starts to negatively react to bad news from the day following the earnings announcement. Overall, we believe this study sheds light on the research of disclosure timing by providing important implications to the market participants including the managers or policy makers. Moreover, we expect that various more detailed researches will be carried out in the future to investigate related issues.2

A Human Dynamic Model for Change Management in Public Service Organization Based on the Case of KOTRA

2