The moderating effect of Korean fashion SMEs' company age and size on the relationship between management ownership and company financial growth

Most Korean companies in the fashion industry are SMEs, and the role of the CEO and management ownership is important for enhancing the firm`s competence and developing strategies. The study aims to examine the effect of management ownership on company financial growth. In particular, the study focuses on the moderating effect of company age and size on Korean fashion SMEs` financial outcomes. Financial data based on company financial statements from 2012 to 2014 was collected by the Data Analysis, Retrieval and Transfer System of Korea`s Financial Supervisory Service. A total of 295 companies` (domestic fashion businesses) data was analyzed by the bootstrap method. The median sales value in the financial year 2014 was 47,492,403,958 KRW, and the company size was divided by it. The companies were in business for an average of 20 years. According to the results, the management ownership had a negative effect on Compound Annual Growth Rate (CAGR) for the three-years, and the relationship between the two variables was moderated by company age. Additionally, the interaction effect of management ownership and company age on 3-CAGR was also moderated by company size. When the companies had spent only a few years in business, a negative effect of management ownership for small firms and a positive effect of management ownership on financial growth for medium firms were found. These results suggest that small companies starting business need to manage their company governance structure to make flexible decisions, and after retaining financial growth, the companies can expand their businesses based on strong ownership.