Corporate Transparency and Firm Performance: Evidence from Venture Firms Listed on the Korean Stock Market


  • Acknowledgments: This study was supported by the Center for Science-based Entrepreneurship of KAIST. The authors would like to thank Professor Yanghon Jung and Professor Seunghun Han for their valuable comments on the revised paper. We also appreciate the efforts of Sunhye Kim, Hyunwoo Lee, Sharon Son, and Ayoung Jin who participated in the data collection.

Corresponding author: Taeyong Yang, Graduate School of Innovation and Technology Management and Department of Management Science, KAIST, 335 Gwahangno, Yuseong-gu, Daejeon 305-701, Korea. Tel: +82-42-350-4331, Fax: +82-42-350-4340, email:


This study proposes a new corporate transparency index comprising four sub-indices: financial, governance, operational, and social transparency. Using our index, we examine the effects of corporate transparency on firm value and the profitability of 162 Korean venture firms. Results show that corporate transparency is positively associated with firm profitability. Financial transparency is positively related to firm profitability and negatively associated with firm value. Firms with a greater level of governance transparency have a higher firm value and a lower return on assets. Operational transparency is negatively related to firm value. Social transparency is positively associated with firm value and profit.