콘텐츠 바로가기
로그인
컨텐츠

Category Open

Resources

tutorial

Collection of research papers and materials on development issues

home

Resources
Economy Economic Conditions
Industry and Technology General
Industry and Technology IT

Print

Competition, financial crisis and corporate performance-Focusing on the Korean IT industry

Related Document
Frame of Image r competition improves corporate performance in the Korean economy. Higher competition might reduce the market share of an individual firm; on the other hand, it might promote managerial efforts aimed at cost reduction and innovation. In addition, corporate performance is affected by financial pressures which will also drive managers to increase the efficiency of the firm. Analysis of panel data for 1,680 Korean firms from 2001 to 2009 supports the hypothesis of a positive relationship between competition and performance. The relationship is found to be especially significant under financial cisis and stronger in the IT industry where the market is highly concentrated. Keywords: competition, productivity, financial crisis, IT industry
1. Introduction
In general, competition can affect managerial slack. According to Hicks (1935), the managers of firms in 1) non-competitive industries tend to prefer a “quiet life,” while the managers of firms in competitive industries are under substantial enduring pressure to curtail slack and improve performance. Managerial slack cannot be sustained in a competitive market and competition can alleviate the managerial preference for the quiet life (Giroud and Mueller, 2008). Also, competition improves corporate performance and is associated with a growth in total factor productivity (Nickell, 1996). According to Nickell et al. (1997), market concentration, financial pressure, and the control exerted by interested parties are all related to the


Full Text
Title Competition, financial crisis and corporate performance-Focusing on the Korean IT industry
Similar Titles
Material Type Articles
Author(English)

Lee, Sangho; Nam, Changi; Lee, Hongkyu

Publisher

[Jincheon]:Korea Information Society Development Institute

Date 2013
Journal Title; Vol./Issue Asian Journal of Information and Communications:Vol. 5(No. 1)
Pages 8
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Economic Conditions
Industry and Technology < General
Industry and Technology < IT
Holding Korea Information Society Development Institute

Abstract

Corporate performance is affected by environmental factors such as product competition and financial distress in the market. This paper examines whether competition improves corporate performance in the Korean economy. Higher competition might reduce the market share of an individual firm; on the other hand, it might promote managerial efforts aimed at cost reduction and innovation. In addition, corporate performance is affected by financial pressures which will also drive managers to increase the efficiency of the firm. Analysis of panel data for 1,680 Korean firms from 2001 to 2009 supports the hypothesis of a positive relationship between competition and performance. The relationship is found to be especially significant under financial crisis and stronger in the IT industry where the market is highly concentrated.