An Empirical Study on the Characteristics of Korean Hidden Champions and Their Success Factors
ILHO KIM
Department of International Trade and Commerce
The Graduate School of Daejeon University
(advised by professor SunGeun Kim, Ph.D in Economics...
An Empirical Study on the Characteristics of Korean Hidden Champions and Their Success Factors
ILHO KIM
Department of International Trade and Commerce
The Graduate School of Daejeon University
(advised by professor SunGeun Kim, Ph.D in Economics)
The South Korean economy has experienced a continuous slow growth recently due to economic polarization between large conglomerates and SMEs and excessive dependence on exports. It is feared that jobless growth of the South Korean economy caused by economic crisis and sluggish domestic demand might go on for years. In order to overcome the crisis and join the league of advanced economies, it is imperative for the South Korean economy to establish policy aimed at shifting the economic focus from large conglomerates to SMEs and the mid-sized firms and nurturing hidden champions with global competitiveness.
Despite the global financial crisis, Germany has enjoyed continuous growth, especially in its employment rate, emerging as a role model for the world economy due to its high growth and low unemployment. Hermann Simon explained that the competitiveness of the German economy lies in its Hidden Champions, which have grown into global companies equipped with strong competitiveness.
South Korea's increased interest in German Hidden Champions has inspired a number of domestic institutions to pursue policy aimed at fostering Korean Hidden Champions. However, the concept of Korean Hidden Champions has not been established, causing chaos among would-be Hidden Champions and dispersing national resources and capacities. Therefore, the South Korean government has announced the Measures for Fostering Korean Hidden Champions aimed at establishing the criterion for selecting the Korean Hidden Champions and strengthening their core competence.
The purpose of this dissertation is to identify the companies appropriate for the criterion, analyze the success factors for business characteristics and its performance, and suggest appropriate measures for developing the Korean Hidden Champions through empirical study.
This dissertation classified 63 SMEs and the mid-sized firms appropriate for the Korean Hidden Champions, and conducted an empirical study on a total of 114 companies including 51 potential Hidden Champions, which benefit from the government's World-Class 300 Project in 2014, using the five-year financial information from 2009 to 2013.
A research model was established with the indicators influencing business performance as independent variables and indicators showing business performance as dependent variables, and a multiple regression analysis was conducted. Independent variables include the selection criterion for the Korean Hidden Champions such as the world market dominance, revenue volume, R&D, export share against the revenue and wage share against the total costs as well as socio-economic contribution variables such as the growth rate of the employees, corporate tax rate, cash flow. Controlled variables such as the firm history, location of the establishment, business type and form as well as the expansion variables such as the age and educational background of the CEO were included in independent variables. Dependent variables include the growth rate of revenue indicating company growth, operating income rate indicating profitability and efficiency of facility investment indicating productivity.
The results of this empirical study show that there are more SMEs than mid-sized firms in the Korean Hidden Champions, and they are mostly Kosdaq-listed, listed on the securities market, and subject to external audit. They are also located in the metropolitan areas and have remarkably higher business performance than domestic corporations in terms of growth(revenue growth rate), profitability(total asset growth rate) and stability(debt to equity ratio).
The results of this empirical study also suggest that the five criterion for selecting the Korean Hidden Champions(world market dominance, revenue volume, R&D, export share against the revenue and wage share against the total costs) and the three socio-economic contribution variables(the growth rate of the employees, corporate tax rate, cash flow) have statistically significant effect on business performance. The results show that the government's Hidden Champion criterion has been appropriately established, and socio-economic contribution variables especially have big influence on business performance. Thus, it is expected that Korean Hidden Champions will become a desirable model for expanding the business culture for corporate social responsibility, and nurturing SMEs and mid-sized firms.
Lastly, the success factors and implications for the Korean Hidden Champions were identified based on the results of this empirical study, and the appropriate measures for developing the model were suggested.
This study is meaningful in that it was the first of its kind on the Korean Hidden Champions appropriate for the government's criterion. Especially, it verified the appropriateness of the government's criterion and suggested the basic data for establishing Korean Hidden Champions as the role model for SMEs and mid-sized firms by identifying success factors such as the socio-economic contribution, and presenting the measures for developing the Korean Hidden Champions. It is expected that this study could lay the foundation for formulating further policy for building global capacity of SMEs and mid-sized firms and nurturing Korean Hidden Champions with world market dominance.
，韩语毕业论文，韩语论文题目 |
