• International Area Studies Review
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• v.15 no.3
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• pp.369-392
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• 2011

A pure project finance is exposed to high default risk because it is made solely based on the business value of the project. Project finance with sinking funds can reduce the high default risk, in that it uses sinking funds to ensure the principal without requiring collaterals or guarantees. In view of economic efficiency, this paper analytically compares project finance with sinking funds to usual project finance and derives the condition for its superiority in corporate tax saving. Because sinking funds generate the repayments for the principal with compounding interest rates, in terms of effectiveness, project finance with sinking funds is suitable for long-term projects whose period is longer than 10 years. Pension funds can be good sources for project finance with sinking funds, since they should be managed to ensure stable investment returns for long periods.

• The Journal of Society for e-Business Studies
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• v.24 no.4
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• pp.135-149
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• 2019

Accounts receivable insurance is a system in which small and medium-sized enterprises insure the accounts receivables acquired by the purchasing company, and the insurance company pays when the purchaser fails to pay the debts. Accounts receivable insurance is a very effective means of eliminating the risk of loss due to the counterparty default, and it is economically effective to protect the domestic industry by preventing the bankruptcy of one company leading to a chain bankruptcy of other companies. In this study, we constructed a business model of the accounts receivable insurance, by building an infrastructure based on a private blockchain in activating the accounts receivable insurance accounts. The accounts receivable insurance platform using these blockchain technologies not only addressed the problem of document and reliability verification for insurance, but also sought ways to facilitate accounts receivable insurance by small businesses through rapid transaction rates, easy network expansion and access management based on private blockchain.

• The Korean Journal of Financial Management
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• v.27 no.2
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• pp.169-204
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• 2010

This paper examines the dynamic relationship between fund flow and market risk at the aggregate level and explores whether sudden sharp changes in fund flow (fund run) can cause a systemic risk in the Korean financial markets. We use daily and weekly data and regression and VAR analysis. Main results of the paper are as follows: First, in the stock market, a concurrent and a lagged unexpected fund flows have a positive relationship with market volatility. A positive shock in fund flow predicts an increase in stock market volatility. In the bond market, an unexpected fund flow has a negative relationship with the default risk premium, but a positive relationship with the term premium. And an unexpected fund flow of the money market fund has a negative relationship with the liquidy risk, but the explanatory power is very low. Second, for examining whether changes in fund flow induce a systemic risk, we construct a spillover index based on the forecast error variance decomposition of VAR model. A spillover index represents that how much the shock in fund flow can explain the change of market risk in a market. In general, explanatory powers from spillover indexes are so fluctuant and low. In the stock market, the impact of shocks in fund flow on market risk is relatively high and persistent during the period from the end of 2007 to 2008, which is the subprime-mortgage crisis period. In bond market, since the end of 2008, the impact of shocks in fund flow spreads to default risk continually, while in the money market, such a systematic effect doesn't take place. The persistent patterns of spillover effect appearing around a certain period in the stock market and the bond market suggest that the shock to the unexpected fund flow may increase the market risk and can be a cause of systemic risk in the financial markets. However, summarizing the results of regression and VAR model analysis, and considering the very low explanatory power of spillover index analysis, we can conclude that changes in fund flow have a very limited power in explaining changes in market risk and it is not very likely to induce the systemic risk by a fund run in the Korean financial markets.

• The Journal of Society for e-Business Studies
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• v.15 no.4
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• pp.285-301
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• 2010

Peer-to-peer (P2P) lending is an open marketplace for loans not from bank but from individuals online. Financial transactions are facilitated directly between individuals ("peers") without any intermediation of a traditional financial institution. A market study by renowned research company forecasts that P2P lending will grow very fast and a couple of P2P lending sites in Korea also are getting attentions by providing the alternative financial services. In P2P lending market, Lender will enjoy higher income generated from the loans in the form of interest than interest that can be earned by financial products provided by official financial institutions. Furthermore, lenders are able to decide who they would lend the money for themselves. Meanwhile, borrowers with low credit scores are able to finance their liquidity requirement with low cost and convenient access to the Internet. The objective of this paper is to introduce P2P lending and its issues of information asymmetry. We provide the insights from the case study of one of P2P lending sites in Korea and review the issues in P2P lending market as research topics. Specifically, information asymmetry issues in both traditional financial institutions and P2P lending are discussed.

• The Korean Journal of Air & Space Law and Policy
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• v.32 no.1
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• pp.139-175
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• 2017

The Assembly plenary session on December 3, 2017 passed a Product Liability Amendment bill that introduced clauses concerning consumer burden of proof and punitive damage reimbursement. More specifically, these newly approved provisions will reduce the burden of proof placed on consumers and levy triple punitive damage on suppliers. Significant increases in the number of product-liability lawsuit and the number of related insurance contracts are expected. Since military aircraft are designed for operational purpose(seeking greater combat effectiveness over greater safety) and used in high-risk environment, it is practically impossible to obtain an affordable product-liability insurance, Without having any backup plan, military aircraft manufacturers directly face all sort of liability risks under Product Liability Act, Warrant Liability Act and Non-Performance of Contract Act. The U.S. experienced similar problems when they first implemented their product-liability law in 1970s. There had been a big dispute among legal practitioner, insurance professionals and scholars concerning military aircraft manufacturer's liability. In order to settle the issue, the U.S. Supreme Court has established a new precedent of Government Contractor Defense(GCD). The U.S. government also included an indemnity clause for military aircraft manufacturers in their FMS Contract with the Korean government. Likewise, Korean military aircraft manufacturers should 1) clearly understand their current position that they cannot afford expensive product-liability insurance and the cost is not accounted in the military procurement calculation, 2) estimate potential liability risks with the ongoing overseas export expansion in mind, 3) set up appropriate risk management measures through regulatory reform and policy development.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.12 no.6
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• pp.13-24
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• 2017

The purpose of this study is to examine the effect of the management of receivables on the management performance of micro manufacturing industries. The results of the survey are as follows. First, among the factors of management of pre- and post-trade receivables in the micro manufacturing industries, management organization and regulations, contract execution management, bad debt control, which are the subordinate factors of credit control, are positive (+) significant effect on stability. In terms of profitability, management organizations and regulations, which are subordinate factors of credit control management, have a positive (+) significant effect on profitability. The recovery management, which is a factor of management of post - receivable receivables, did not have a significant effect on the stability and profitability of financial management performance. Second, the effect of financial performance on organizational satisfaction is positively related to stability, while profitability has no significant effect on organizational satisfaction. The implication of this study is that pre - trade receivables management is more important than post - trade receivables management in the management of accounts receivables of micro manufacturing industries. Proactive credit management refers to the procedure of establishing and managing personal guarantees and physical guarantees in order to smooth the execution of the obligations at the same time as the contract is concluded through processes such as credit investigation, analysis and evaluation, and sales decision before the contract is concluded. Post receivables management based on the assumption of default is a receivables management procedure from receipt of receivables that are already defaulted to bad debts to bad debt processing. If the collection of receivables is delayed or bad debt is increased, Furthermore, a corporation may be subject to bankruptcy risk (insolvency by paper profits). Therefore, it is meaningful that this study suggests direction to induce change of contract type in advance by understanding the possibility of settlement of accounts receivable and recovery of bad debts within the day of transition in case of contract of micro manufacturing industries.