Korea’s five leading industries-chemical, automobile, shipbuilding, metal and electronics-have been the growth engines of the Korean economy for the last 30 years. However, with their performance weakening in the past few years, Korea’s annual growth rate has dropped to less than 2%. Just as the Japanese economy struggled through the lost decades, Korea’s leading industries have been facing signals of arriving at a Strategic Inflection Point (“SIP”) since the mid-2000s. The objective of this study is to present an appropriate value strategy for Korean firms in leading industries to gain sustainable competitive advantages. This paper examines the following issues : First, it diagnoses the signs and timing of SIP for the five leading industries. Second, this study examines 78 Korean and Japanese firms in order to understand the adaptation strategies of the highest and lowest performing firms from a value strategy point of view. Third, it empirically analyzes the correlation between the indicators of value strategy and the accounting performances of the Korean and Japanese firms. The data set used in the cluster analysis were collected from KISLINE database of NICE Information Service and annual reports. The findings in the case analyses of high and low performing companies show that high value-added specialty chemical materials and electronic component manufacturers that had a strong focus on value creation were defined as high performing companies. And in the cosmetic and automobile industries, companies with a strong emphasis on value appropriation gained high performance. Furthermore, the study conducted a cluster analysis based on two indicators R&D and advertisement expense. The analysis shows that a significant gap exists in the operating incomes among three groups classified under the value strategy. The study recommends that Korean firms are requested to increase R&D expenditure, conduct M&A and collaborate with companies that own source technologies to narrow the technology gap and improve their segment portfolio from commodity to value-added products.

Korea’s main manufacturing industries, which have led its economy for the past three decades, are faced with a serious downturn and loss of competitive advantages due to the current economic depression, China’s rise, and the drop of oil prices. Korean business firms must adopt the paradigm shift in their value strategies, along with a government-led industrial restructuring in order to gain sustainable competitive advantages. Business firms allocate their limited resources between value creation and value appropriation, however, what effect does strategic emphasis on value creation versus value appropriation have on a business firm's financial performance? This paper empirically addresses this issue by examining the effect of shifts in strategic emphasis on stock return. Furthermore, this study examines appropriate choices of strategic emphasis to gain differential financial performance. The data set used in this regression analysis comes from the KISLINE database of NICE Information Service. The variables that form the basis of this analysis are stock return, ROA, and Strategic Emphasis [(advertising expenditures-R&D expenditures)/assets]. The interactive effect with situational factors regarding the firm and the type of technological environment in which the firm is operating was also analyzed. Our results show that investors acknowledge a shift of strategic emphasis as a sign of stock valuation. In comparison to US, Korean business firms have weak value creation capabilities in high-technology industries, and weak value appropriation capabilities in low-technology industries. This proves Korean firms are fast followers in the global market. Our findings suggest that Korean firms have to adopt a balanced value strategy, nurturing value creation and developing value appropriation for overcoming the current economic downturn and becoming a first mover in the dawn of “Industry 4.0.”

Priority rules or sequencing heuristics conventionally used to determine resource allocation is to maximize the earned value on time and cost. This study provides a effective strategy-oriented approach for the program resource management problem with limi

This research aims to examine (1) the effect of carbon emission disclosure on firm value, (2) the effect of good corporate governance on firm value, (3) the mediating role of financial performance between carbon emission disclosure and firm value, and (4) the mediating role of financial performance between good corporate governance and firm value. The research sample includes 43 mining, agro, and manufacturing firms listed in the Indonesian Stock Exchange over the 2015-2017 period. Carbon emission disclosure is measured by an indicator of the Global Reporting Initiative Series of Environmental Aspect. Good corporate governance is measured by the corporate governance score of shareholder rights, boards of directors, outside directors, audit committee and internal auditor, and disclosure to investors. Financial performance is measured by return on assets, while firm value is measured by Tobin’s Q. Data analysis uses the structural equation modeling. The result shows carbon emission disclosure and good corporate governance have no direct effect on firm value. On the other hand, financial performance mediates the effect of carbon emission disclosure and good corporate governance on firm value. It shows that higher carbon emission disclosure and good corporate governance are meaningless for the investor if they do not give any financial performance improvement.

The purpose of this paper is to examine a financial distress premium in the emerging market. A risk-return trade-off of negative book equity (NBE) and distress firms is empirically analyzed using data from the Stock Exchange of Thailand. This research employs Ohlson’s (1980) bankruptcy model as a measurement of distress risk. The results indicate that distress firms outperform solvent firms in the Thai market and deny distress anomaly often found in the developed market. Fama-Frech (1993) three-factor model and Carhart (1997) four-factor model verify the existence of a distress premium in the Thai capital market. Risk-seeking investors demand greater compensation for bearing risks of distress firms’ going concern. This paper provides fresh evidence that default risk is a significant explanatory factor in pricing stocks in the emerging market. Also, this study sheds light on the role of NBE firms in asset pricing. Most studies eliminate NBE firms from their sample. However, NBE firms yield superior average cross-sectional returns, albeit with higher volatility. Investors are rewarded with distress risks associated with NBE firms. The outperformance of NBE firms is statistically significant when compared to the overall market. The NBE premium disappears when factoring size, value, and momentum in time-series analysis.