Hicheon Kim

International Diversification: Effects on Innovation and Firm Performance in Product-Diversified Firms

Theory suggests and results show that firm performance is initially positive but eventually levels off and becomes negative as international diversification increases. Product diversification moder...

Ownership Structure and the Relationship Between Financial Slack and R&D Investments: Evidence from Korean Firms

We use agency theory to examine the influence of ownership structure on the relationship between financial slack and R&D investments, highlighting how that relationship might differ depending on the identity of the owners, and their potentially different interests. In doing so, we extend the scope of agency theory by examining the principal-principal conflicts of interests that may exist among different types of owners. Using a sample of Korean manufacturing firms in R&D-intensive industries between 1998 and 2003, we find that financial slack has an inverted U-shaped relationship with R&D investments. Furthermore, that relationship varies depending on the presence of different types of owners. Family ownership positively moderates the relationship between financial slack and R&D investments, whereas domestic institutional investors and foreign investors negatively moderate that relationship. Our results show that distinguishing among different types of owners is instrumental in enhancing our understanding of the nature of the relationship between financial slack and R&D investments.

The Multidivisional Structure: Organizational Fossil or Source of Value?

The multidivisional (M-form) structure has been variously characterized as the most significant organizational innovation in the twentieth century (Williamson, 1985) and as an organizational fossil that is increasingly irrelevant in the modern world (Bettis, 1991). Against this background, the purpose of this paper is threefold. First, to critically evaluate three perspectives, including transaction cost, strategic management and sociological, relating to the M-form firm. Second, to examine what the empirical evidence finds about relationships proposed by these perspectives. Finally, to develop a model that summarizes the relationships proposed among these perspectives and make suggestions about future theory building and areas where further empirical work is needed.

Corporate Governance Systems: Effects of Capital and Labor Market Congruency on Corporate Innovation and Global Competitiveness

Drawing on institutional economics, this article addresses how institutional congruence between capital and labor markets influences corporate governance systems, which, in turn, create differences in national corporate innovation and entrepreneurship systems and subsequently global competitiveness. We argue that such institutional congruence cultivates two ideal corporate governance systems. The first ideal type is the market-based system with transactional capital and external labor markets. This corporate governance system facilitates more explorative and revolutionary innovations. The second ideal type is the relationship-based governance system with relational capital and internal labor markets. This system facilitates more exploitative and evolutionary innovations. We wrap up by discussing how institutional adjustments are being pursued for each governance system because each type has advantages and disadvantages that require adjustments. Finally, we present implications that our congruence model suggests for global competitiveness, high-tech management, and public policy regarding national innovation systems.