Asymmetrical Corporate Responses to Economic Information: Firm-Size Effect in Korean Case

Abstract

This research utilized longitudinal economic data to analyze differences by firm size in how business sentiments are affected by economic news and economic conditions. A regression was also conducted for the relationship between firm-specific BSI(Business Survey Index) values and increase rate of employment and business activities. Results showed no statistically significant effect from economic news tone on business sentiment for large firm sizes as opposed to individuals. At the same time, the economic situation was found to have an effect on business sentiment regardless of firm size. Anticipated future economic conditions exhibited an effect on business sentiment regardless of firm size, but current economic conditions had an effect on business sentiment only for small firms. Business sentiment had an effect on business activities according to GDP rate, regardless of firm size. Theoretical and managerial implications as well as directions for future research are discussed.