A Comparison of Corporate Profitability in the Post-era of the Global Financial Turmoil Between the United States and the Republic of Korea

As the ultimate objective of corporate management, it is interesting to identify the financial determinants of profitability toward maximizing shareholders’ wealth. Little attention seems to have been paid so far to an inter-country comparison of corporate profitability between firms in an advanced market and in an emerging market. Data from firms listed on the New York Stock Exchange (NYSE) and the Korea Exchange (KRX) were collected for the study covering the post-period of the global financial turmoil from 2010 to 2015. Three primary hypotheses were tested to identify the financial factors in determining the market-value and the book-value based profitability indices. As described, a majority of total explanatory variables showed statistical significance on the two differently measured indices for NYSE-listed firms, while about half of the indicator variables revealed their importance on the book-value based one. Moreover, both sample firms across the two capital markets seemed to maintain relatively excessive non-current asset turnover ratio, which may result in diminishing operating profit margins after the global financial crisis.