Real Activity Management in the Presence of Labor Unions : An Empirical Study Using Firm Level Union Data

Kiyoung Chang,Young Sang Kim,Ying Li 한국재무학회 2018 한국재무학회 학술대회 Vol.2018 No.05

In the presence of labor unions, management has incentives to lower earnings to prevent labor unions from extracting rents (“manipulation hypothesis”) or to boost earnings through overproduction to lower costs of unit production or reducing discretionary R&D expenditures to mitigate employees’ perception of unemployment risk and reduce cost to attract and retain employees (“forced cooperation hypothesis”). Strong union affects manager’s decision in a way that firms end up getting lower abnormal production costs and lower abnormal R&D expenditures. We test these two hypotheses through the lens of real activity management because of labor unions’ particular interest directly linked in real activities. Consistent with the forced cooperation hypothesis, we find that the power of labor unions is positively associated with real activity management, especially through the overproduction channel. The extent of upward real activity varies with union power with a magnitude that is both statistically and economically significant. The positive relation between union power and real activity is stronger when the cost of attracting and retaining employees is high, and when labor unions are valued for job security purpose. In addition, the result is consistent when states’ unemployment insurance benefits suffer negative shocks, when states adopt the “right-to-work” laws, and when firms switch from unionized to nonunionized.

Does National Culture Influence the Firm’s Choice of Debt Maturity?

Kiyoung Chang,Jung-Bum Wee,Ha-Chin Yi 한국재무학회 2011 한국재무학회 학술대회 Vol.2011 No.09

Debt is an effective mechanism to mitigate agency costs in relieving manager-shareholder conflicts. Similarly, a choice over maturity of debt allows the firm to discipline entrenched managers. We show cross-country evidence that national culture along with corporate governance factor influences the lender’s (or the borrower’s) choice over the firm’s debt maturity. Using Hofestede’s frameworks (1980, 1991), uncertainty avoidance index (UAI), masculinity (MAS), and long-term orientation (LTO) indices are negatively related to overall debt maturity in country. This implies that the risk-averse lenders offer (or, borrowing firms use) short-term maturity debt when surrounding economic environment becomes more uncertain and ambiguous. This is consistent with literatures that national cultural tendency play a critical role in determining financing decision in the presence of uncertainty and ambiguity. We argue that national culture is one of the last factors to the puzzle of disparity of debt maturities across countries. The relative effect of national culture and corporate governance on firms’ debt maturity selection depends on whether a country’s financial system is bank-based economy (e.g., Japan and Germany) or market-based economy (e.g., U.S. and U.K.).

Weak firms follow strong firms in hot IPO markets

Kiyoung Chang,Yong-Cheol Kim,Hyeongsop Shim 한국재무학회 2010 한국재무학회 학술대회 Vol.2010 No.05

We investigate whether IPOs occurring during hot markets are fundamentally different from those occurring during depressed markets. Consistent with market timing theory, we find that firms went public during hot markets have lower survival probability, shorter survival duration, and worse long-run performance than firms went public during depressed markets. Second, we ask whether early issuers during hot markets (pioneers) have better investment opportunity than late issuers during the same hot markets (followers). As predicted by information spillover theory of Alti (2005), we find that pioneers have higher survival probability, longer survival duration, and better long-run performance than followers.

Can Local Long-term Institutional Ownership Alleviate Information Asymmetry in Bank Loan Pricing?

Kiyoung Chang,Ying Li,Ha-Chin Yi 한국재무학회 2015 한국재무학회 학술대회 Vol.2015 No.05

This paper investigates whether informed ownership alleviates information asymmetry in bank loan pricing. We use local long-term institutional ownership (LLTIO) as a proxy for exogenous ownership that possesses geography-related soft information, and show that it is negatively associated with the spread charged by syndicate lenders. The negative relation between LLTIO and loan spread is salient only when geography-related soft information helps the lender to evaluate the borrower’s creditworthiness and when conflicts of interest between equity and debt holders are unlikely. We show that the mechanisms for the LLTIO effect include the alleviation of both moral hazard and adverse selection problems.

Effects of Cultural Difference on Cross‐Country Mergers and Acquisitions

Kiyoung Chang,Ha‐Chin Yi,Yewmun Yip 사람과세계경영학회 2012 Global Business and Finance Review Vol.17 No.2

In this paper, we examine whether the performance of U.S. companies engaging in cross-border mergers and acquisitions (M&A) is influenced by the culture of the host countries in which the target firms are located. We observe that acquiring firms that enter culturally distant markets tend to have lower leverage and prefer smaller deals in order to mitigate the cultural risk. Contrary to the claim of the traditional cultural clash hypothesis, we find that acquiring firms, on the average, earn significantly higher cumulative abnormal returns when they announce deals with target firms in countries whose cultures are distant from that of the U.S. However, the positive cultural effect is found only when we include smaller deals. Therefore, it is critical to include smaller deals to capture the cultural effect on M&A performance given that companies tend to be more cautious when entering culturally distant markets. Although the culture effect is stronger for private firms, our result is robust regardless of the methods of payment or whether target firm is private or public.

Is Doing Good Good for Your Credit Rating? - A Trust-based Hypothesis and Global Evidence

Kiyoung Chang,Ying Li,Hyeongsop Shim 한국재무학회 2017 한국재무학회 학술대회 Vol.2017 No.05

Whether and how doing good (corporate social responsibility, CSR) makes business sense has been a source of constant debate. We suggest that trust underlies the mixed theory and empirical evidence of such debate. Doing good helps sustain a firm’s long-term credit rating by building trust, which alleviates stakeholder relationship uncertainties in incomplete contracts. Doing good is good for credit ratings when it is effective in building trust, when and where the marginal benefit of “earned trust” is high, and where societal trust is high and likely to mitigate moral hazard problems. Our results are robust to endogeneity and robustness tests.

The Spatial Diffusion of Suicide Attacks

( Kiyoung Chang ),( William Reed ) 한국국방연구원 2022 The Korean Journal of Defense Analysis Vol.34 No.2

This paper studies the diffusion of suicide bombings as a tactic employed by terrorist groups from 1981 to 2008. The empirical strategy is motivated by the literature on the diffusion of innovation. Specifically, this paper builds on the literature on the diffusion of policies across states to develop hypotheses about the spread of suicide attacks across space and over time. We use data from the National Consortium for the Study of Terrorism and Responses to Terrorism (START) to evaluate hypotheses about the diffusion of suicide bombings. The results suggest a consistent and robust relationship between geography and the diffusion of suicide bombings. Successful suicide attacks appear to diffuse across borders and to increase over time.

‘전쟁거래이론’을 통해 바라본 한반도 안보환경변화와 평화구축 방안 연구

장기영(Kiyoung Chang) 한국정치정보학회 2022 정치정보연구 Vol.25 No.2

‘국내청중’ 대(對) ‘국외청중’

장기영(Kiyoung Chang) 서울대학교 아시아연구소 2018 아시아리뷰 Vol.7 No.2

본 연구는 미중 인권분쟁의 전략적 측면을 조명하기 위하여 중국 내의 청중(domestic audience)과 국제사회의 청중(international audience) 모두가 인권분쟁의 주요한 관찰자라는 점에 주목한다. 구체적으로 미중 인권분쟁을 관찰하는 국내청중과 국외청중이 형성하는 중국정부의 서로 다른 두 가지 평판―분리독립운동 및 민주화 운동을 ‘단호하게 응징하는 평판(reputation for toughness)’과 ‘국제법 및 인권을 수호하려는 평판(reputation for human rights protection)’―이 갖는 상충관계(trade-off)하에서 미국과 중국은 각각 어떠한 전략을 취하는지 고찰해 본다. 서로 다른 두 평판 사이의 상충관계를 고려할 때 미국은 중국이 ‘인권 수호에 대한 평판’ 구축에 더욱 전념하는 대신 ‘단호함에 대한 평판’은 양보하기를 원한다. 반면에 중국은 ‘단호함에 대한 평판’과 ‘인권 수호에 대한 평판’이 갖는 상충관계에서 벗어나기 위하여 인권문제에 대하여 ‘탓하기 게임(blaming game)’ 전략을 추구한다. This paper deals with the tension between China’s different reputations in the context of human rights issues that are: 1) a reputation for toughness, and 2) a reputation for keeping human rights standards. Given that the Chinese government’s use of violence against civilians may signal its toughness more effectively to potential rebel groups, its reputation for toughness may influence potential rebel groups’ behaviors in China. However, such a reputation for toughness is inherently associated with China’s bad reputation in observing human rights norms. Given the tradeoff relationship between the two different reputations, the United States wants China to invest more heavily in improving its human rights records. From the point of view of China, it tries to avoid the trade-offs by playing a blame game with the United States on human rights issues.

북핵 해법에 대한 세대간 인식차이

장기영(Kiyoung, Chang) 명지대학교 미래정치연구소 2018 미래정치연구 Vol.8 No.2

최근 북한발 핵위협이 고조되면서 북핵 해법에 대한 다양한 논의가 국제사회에서 대두되고 있다. 한편에서는 한국이나 미국이 유사시 북한 핵시설에 대하여 선제공격을 할 수 있는가에 대한 논의가 진행되고 있고 선제공격이 초래할 수 있는 많은 위험에도 불구하고 선제타격을 긍정적으로 인식하고 있는 한국 국민들 또한 점차 많아지고 있다. 다른 한편으로는 선제공격 이후 군사적 갈등이 전면전으로 확대되어 막대한 피해를 야기할 수 있다는 가능성 때문에 북한에 대한 보상 차원 또는 개방정책 유도 차원에서의 경제지원 방안에 대한 논의 역시 진행되고 있다. 본 연구는 북한에 대한 선제타격의 필요성과 대북지원 필요성에 대하여 한국 국민들의 세대간 또는 연령간 인식이 어떻게 다른지를 규명한다. 본 연구에서는 언론에서 흔히 언급되는 10세 단위의 연령 집단뿐만 아니라 특정시점에 주요한 역사 및 정치적 사건을 함께 경험한 세대를 주요 세대 변수로 간주한다. 본 연구의 경험적 분석에 따르면 민주당 정권 10년(1998~2007)에 걸쳐 20대였던 30·40대는 상대적으로 대북 선제공격에 대하여 우려하고 대북 원조를 찬성하는 경향이 있는 반면에 촛불세대(1988~)와 전후 산업화 세대(1942~1951) 및 한국전쟁 세대(~1941)는 대북 선제공격을 찬성하고 대북 원조를 반대하는 경향이 있음을 보여준다. North Korea’s nuclear weapons program becomes a deep concern for South Korea. Many South Koreans believe that the riskiest option would be any option that calls for a preemptive strike because it may result in a reciprocal attack by North Korea on South Korea that may inflict the huge number of casualties. Others still support that South Korea should send the aid to North Korea because North Korea could limit its nuclear effort in return for aid. Recently, however, a growing number of South Koreans are supportive of launching a preemptive strike as a way to deal with North Korea’s nuclear threats. This study examines who support a preemptive strike on North Korea and South Korea’s assistance to North Korea by focusing on the generational difference. My empirical analysis suggests that the relationship between generation (or age) and the likelihood of supporting a preemptive strike (or assistance to North Korea) is curvilinear. Both the younger and older generation support a preemptive strike but oppose the South’s aid to the North.