The Impact of Ownership Structure on Internationalization : An Empirical Study of Korean SMEs

Cho, Jae young; Lee, Jang woo

doi:10.17549/gbfr.2017.22.1.51

Cited by 11 publications

(16 citation statements)

References 39 publications

(137 reference statements)

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“…Therefore, SMEs with a healthier financial structure are in a better position to increase export Ownership and export performance of SMEs performance, and family-controlled SMEs can reach this result by minimising the use of external equity from nonfamily members. Our work also contributes to the literature by enlarging the academic knowledge about the pros and cons of family ownership towards export performance, including financial moderating variables, because previous studies have generated mixed and inconclusive findings and have very seldom examined SMEs (Cho and Lee, 2017;Nieto, 2005, 2006). In addition, we have focused on Italian SMEs that operate in a bank-oriented financial system where there is a prevalence of bank capital, while the use of other sources of finance, for example, an alternative SME listing, bond markets for SMEs and FINTECH channels, are less developed.…”

Section: Discussionmentioning

confidence: 92%

Family ownership and the export performance of SMEs: the moderating role of financial constraints and flexibility

Pascucci

Domenichelli

Peruffo

et al. 2021

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PurposeThis article investigates the relationship between family ownership and export performance in the context of SMEs while also considering the moderating role of the financial dimension and, in particular, financial constraints and financial flexibility.Design/methodology/approachWe select a sample of 1,132 Italian SMEs to examine through an econometric analysis the role and impact of family ownership and the financial moderating variables being used on their export performance.FindingsThe results indicate that there is a U-shaped relationship between family ownership and export performance: the highest levels of export performance correspond to the lowest and highest family ownership levels, whereas when a mixture of family and nonfamily ownership exists, the performance suffers because of “conflicting voices” dominating strategic visions and approaches, harming the firm's export commitment. Moreover, the findings show that lower financial constraints and/or stronger financial flexibility improve the relationship between family ownership and export performance.Research limitations/implicationsOur findings show that the ownership structure is important for export performance; in particular, firms should avoid a mixture between family and nonfamily ownership because it is detrimental to export performance. Moreover, Italian SMEs need to develop sources of financing other than the banking channel, and policy makers should favour this process to overcome financial constraint problems and improve financial flexibility. Limitations concern the use of other econometric approaches and measurement variables to further investigate the connection between family ownership and export performance.Originality/valueThe present study enhances the comprehension of the complex relationship between family ownership and export performance by documenting the relevance of the level of family ownership and considering the moderating role of financial constraints and flexibility.

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Section: Discussionmentioning

confidence: 92%

Family ownership and the export performance of SMEs: the moderating role of financial constraints and flexibility

Pascucci

Domenichelli

Peruffo

et al. 2021

JSBED

View full text Add to dashboard Cite

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“…Family-controlled firms in Korea prefer strategies that endorse long-term success, even when the recognized risk is high (Hemmert 2018). A highly competitive Korean market as well as a high level of family ownership may thus compel Korean SMEs to invest in explorative innovation and internationalization, as risky strategies cause income uncertainty in the short term but can be highly profitable in the long run (Cho and Lee 2017). Our findings suggest that it may in fact be rewarding for many Korean SMEs to engage aggressively either in explorative innovation or in internationalization.…”

Section: Discussionmentioning

confidence: 82%

Performance implications of combining innovation and internationalization for Korean small- and medium-sized manufacturing firms: an exploration–exploitation perspective

Lee

Hemmert

2021

Asian Bus Manage

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While previous studies on firms' innovation and internationalization have focused on the causal relationship between the two strategies, less is known on whether they are complements or substitutes for enhancing small and medium-sized enterprise (SME) performance. We introduce an exploration-exploitation perspective on the two strategies and examine how the relative weight of explorative versus exploitative innovation and of international versus domestic market scope affect performance, individually and in concert. Analyzing data from 579 South Korean manufacturing SMEs, we find that firms should balance explorative and exploitative orientation within and across the innovation and market scope domains to enhance financial performance. These findings are in contrast to results from previous studies on large companies and Western country firms and suggest that SMEs from newly industrialized Asian countries need to closely align their innovation and internationalization strategies to mitigate the liabilities of foreignness and smallness.

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“…We use several control variables besides the main independent variables (Sullivan & Constand, 1996;Larson, Madura, & Akhigbe, 2001;Kim et al, 2010;Cho. & Lee 2017).…”

Section: Control Variablesmentioning

confidence: 99%

Is Blockholder Dispersion Attracting Foreign Investors?

Kim¹,

Cho²

2018

Glob Bus Financ Rev

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This paper examines the impact of blockholder dispersion on the foreign ownership in the Korean stock market over the period 2005-2016. We use the Herfindahl Index as a substitute variable for blockholder dispersion. Results show that a lower Herfindahl Index leads to a higher foreign ownership of the publicly listed companies in Korea. This implies that foreign investors prefer companies with dispersed ownership. We confirmed that foreign investors also preferred firms with low volatility, small dividend yields, large, low leverage, and high accounting performance. We have also found that the behavior of foreign investors is different before and after global financial risk. Our findings contribute to our understanding regarding to the relation between foreign investors and ownership dispersion in Korean stock markets.

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The Impact of Ownership Structure on Internationalization : An Empirical Study of Korean SMEs

Cited by 11 publications

References 39 publications

Family ownership and the export performance of SMEs: the moderating role of financial constraints and flexibility

Family ownership and the export performance of SMEs: the moderating role of financial constraints and flexibility

Performance implications of combining innovation and internationalization for Korean small- and medium-sized manufacturing firms: an exploration–exploitation perspective

Is Blockholder Dispersion Attracting Foreign Investors?

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