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The Role of the Related Party in the Internationalization of SMEs: Evidence from Korea

권재현|신준호
한국국제경영학회 (Korean Academy of International Business)|2019.11|국제경영연구 (International Business Journal)|제30권 제4호|pp. 101-133

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참고문헌

키워드

특수관계인국제화SMEs중소기업internationalizationrelated party소유 집중ownership concentration국제화와 기업성과의 관계
주제분류경영학

초록

With small and medium-sized enterprises (SMEs) in South Korea, this paper examines how the related party affects internationalization and performance. The research on the related party solely focused on the effect of transactions on firm performance and empirical findings on this causal link have been inconclusive. In order to address the heterogeneous impacts of ownership on firm performance, our study aims to determine and isolate the effect of ownership structure on performance by analyzing the moderating effect of the related party on the relationship between the degree of internationalization and performance. Using the SMEs data of listed companies for 2014-2018, we find that the related party is negatively related to the degree of internationalization. In addition, the related party negatively moderates the relationship between the degree of internationalization and performance. These findings imply that the related party is risk averse in entering new market and increases the cost of internationalization derived from the complexity of managerial and organizational coordination as the degree of internationalization increases.

Abstract

With small and medium-sized enterprises (SMEs) in South Korea, this paper examines how the related party affects internationalization and performance. The research on the related party solely focused on the effect of transactions on firm performance and empirical findings on this causal link have been inconclusive. In order to address the heterogeneous impacts of ownership on firm performance, our study aims to determine and isolate the effect of ownership structure on performance by analyzing the moderating effect of the related party on the relationship between the degree of internationalization and performance. Using the SMEs data of listed companies for 2014-2018, we find that the related party is negatively related to the degree of internationalization. In addition, the related party negatively moderates the relationship between the degree of internationalization and performance. These findings imply that the related party is risk averse in entering new market and increases the cost of internationalization derived from the complexity of managerial and organizational coordination as the degree of internationalization increases.

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