Certification Benefits in High-Tech Industry: Evidence from Supply Contracts in the Korean Market

Noolee Kim and Kyoung-Min Kwon

Emerging Markets Finance and Trade, 2015, vol. 51, issue 5, 1001-1020

Abstract: We examine the certification benefits of supply contracts in the Korean market, with special attention to high-tech and KOSDAQ supplier firms by analyzing the influences of supply contract announcements on supplier firms’ valuation and operating performances. We find that the announcement of supply contracts have a significantly positive effect on the supplier firm value. This positive effect is greater for the suppliers in the high-tech industry especially in the KOSDAQ market. We also find that the enhancements of operating performances are greater for high-tech firms traded in KOSDAQ. These results indicate stronger certification benefits of supply contracts by high-tech suppliers.

Date: 2015
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DOI: 10.1080/1540496X.2015.1061390

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