• Title/Summary/Keyword: Debt Crisis

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A Study on the Sudden Stop in Capital Flows and Foreign Exchange and Distribution Market Stability (자본유출입 급변동과 외환 및 유통시장 안정성에 관한 연구)

  • Kim, Yoon-Chul;Yi, Myung-Hoon
    • Journal of Distribution Science
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    • v.14 no.12
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    • pp.79-87
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    • 2016
  • Purpose - Since 1990, the sudden stop in capital flows has caused the economic crisis. The purpose of this research is to suggest the policy measures to mitigate the risk of the sudden stop in capital flows. To this end, we examine the theoretical framework and analyze the case study for countries which are faced with the sudden stop. Also we examine the structural problems of the foreign exchange market in Korea and derive the policy implications to prevent the sudden stop. Research design, data, and methodology - The criteria of whether the sudden stop in capital flows occurs are based upon Calvo et al. (2008). In case the proxy variable for the balance of capital account decreases from the average by over twice standard deviation, we determine that the sudden stop occurs for that country. The sample period is from January 1990 to December 2008, as in Calvo (2014). The sample countries are 17 developed countries and 19 emerging market countries, which are different from those of the previous papers as Agosin and Huaita (2012), and Calvo (2014). When the exchange market pressure index(EMPI) is deviated from the average by over three times standard deviation, we determine that the foreign exchange market is unstable for that country. Results - We find that the characteristics of the sudden stop in capital flows are the bunching or contagion among countries, the rapid drop in real effective exchange rate, and the huge decrease in foreign exchange reserves. Many countries tried to increase foreign exchange reserves and regulate capital flows. Also the foreign exchange market in Korea are found to be the volatile exchange rate, the vulnerable external debt and careless management of the foreign exchange derivatives transaction risk. Conclusions - To lessen the risk in the sudden stop of capital flows, this research suggests the some useful policy measures. To enhance the foreign exchange and distribution market stability, we should improve the price mechanism of exchange rate, hold the appropriate level of foreign exchange reserves, prevent excessive inflows of foreign exchange and promote sound transactions of foreign exchange derivatives.

An Empirical Study on the Use of Trade Insurance by Korea Agricultural and Marine Products Trading Companies (한국 농수산물 수출업체의 무역보험상품 이용에 관한 실증분석)

  • PAK, Myong-Sop;PAK, Young-Hyun
    • THE INTERNATIONAL COMMERCE & LAW REVIEW
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    • v.66
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    • pp.285-312
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    • 2015
  • Export and import of food, agriculture, forestry, fishery products are suffering from low growth rate due to the European financial crisis, global recession, and Japan's 2012 export expansion following the aftermath of 2011 earthquake. Upon the signing and enactment of Free Trade Agreement with the U.S. and the EU, agriculture and fishery product have become the center of attention. Agriculture and fishery was reported to be 80million dollars, 1.46% of total national export, in 2012. Starting from2000, South Korea's government began its effort to expand agriculture and fishery export and as a result, export has steadily increased despite decreased consumption led by global recession. K-Sure has started an insurance program with the purpose of promoting SME business's export. It protects SME business against risk arising from credit, emergency, bad debt, and domestic price increase. This study aims to evaluate the service quality of K-Sure's insurance program via surveying SME businesses in the agriculture and fishery industry. Also this study will identify key service factors for SME businesses and explore ways to expand SME exports of agriculture and fishery by analyzing consumer satisfaction index. Results indicated service product quality factor, service communication quality factor, and social quality factor was key to improving consumer satisfaction for SME businesses in agriculture and fishery industry. Service product quality factor had a negative effect on consumer satisfaction in term of variety and results indicated that service communication quality factor's responsiveness element had minimal impact on consumer satisfaction. Conversely, all elements for social quality factor had positive effects on consumer satisfaction. Thus, leading to the conclusion that improvements in service product quality factor and service communication quality factor will indeed increase consumer satisfaction.

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Business performance and earnings quality in the information and communication industry before and after the COVID-19 pandemic (코로나19 팬데믹 전·후 정보통신업의 경영성과와 이익의 질)

  • Park, Su-Gyeong
    • Journal of Digital Convergence
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    • v.19 no.11
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    • pp.113-119
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    • 2021
  • This study compared business performance and earnings quality before and after the COVID-19 pandemic for information and communication companies whose sales increased due to the impact of the COVID-19 pandemic. For this, 4 indicators of ROA, growth potential, liquidity, and stability are used for business performance, and for earnings quality, the standard deviation of the residuals measured by the Dechow and Dichev(2002) model and Francis et al.(2005) model was used. As a result of the analysis, ROA, a representative business performance indicator, increased after xthe period compared to the period before the pandemic, but liquidity was rather deteriorated. As for the quality of earnings, it was confirmed that earnings sustainability is maintained in the post-pandemic period compared to the previous period, similar to ROA. Overall, the profit level and earnings quality of information and communications companies seemed to be improving, while liquidity was deteriorating. This confirms that companies that have overcome the immediate crisis are not ready to pay off their debts right away. Therefore, it suggests that companies need restructuring to reduce their increased debt from the time the COVID-19 subsides.

Messianism in Civilizational History: The Transformation of the Buddhist Messiah via Maitreya

  • DINH Hong Hai
    • Journal of Daesoon Thought and the Religions of East Asia
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    • v.3 no.2
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    • pp.71-92
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    • 2024
  • The world we live in is becoming more convenient thanks to the inventions of science and technology. Still, the world is also becoming more and more unpredictable with the current situation of VUCA (Volatility, Uncertainty, Complexity, Ambiguity). The Covid-19 pandemic brought the biggest global disaster ever with 774,631,444 infected people and 7,031,216 deaths (WHO on February 11, 2024) but it seems that humanity is gradually forgetting this disaster. Meanwhile the economic stimulus packages worth trillions of dollars from governments after the pandemic have further caused the world debt bubble to swell. The bubble burst scenario is something that many economic experts fear. Apparently, in the transitional period of the early decades of the 21st century, the world's economic, cultural, political, social, natural, and environmental aspects have undergone profound transformations: from the real estate and finance crises in the United States since 2008; through the melting of the Arctic ice over the past several decades; to the double disaster of the earthquake and tsunami in Japan in 2011. Especially, in the context of the world economic crisis after the COVID-19 pandemic, the human achievements of the past thousands of years are in jeopardy of being wiped out in an instant. Many people are predicting a bad scenario for a chain collapse. Facing the signals of an imminent economic catastrophe based on the appearance of "the Gray Rhino, Black Swan and White Elephant," many drawn in by Eschatological thought declare that Doomsday will occur shortly. This is the time for many other people to hope for the incoming Messiah. The Messiah is said to appear when people feel despair or suffer a great disaster because faith in the Savior can help them overcome adversity mentally. This research will find out how adherents of Buddhism view and deal with civilizational crises by examining history via symbols associated with Maitreya as based upon the Buddhist Messiah, Maitreya.

Corporate Default Prediction Model Using Deep Learning Time Series Algorithm, RNN and LSTM (딥러닝 시계열 알고리즘 적용한 기업부도예측모형 유용성 검증)

  • Cha, Sungjae;Kang, Jungseok
    • Journal of Intelligence and Information Systems
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    • v.24 no.4
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    • pp.1-32
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    • 2018
  • In addition to stakeholders including managers, employees, creditors, and investors of bankrupt companies, corporate defaults have a ripple effect on the local and national economy. Before the Asian financial crisis, the Korean government only analyzed SMEs and tried to improve the forecasting power of a default prediction model, rather than developing various corporate default models. As a result, even large corporations called 'chaebol enterprises' become bankrupt. Even after that, the analysis of past corporate defaults has been focused on specific variables, and when the government restructured immediately after the global financial crisis, they only focused on certain main variables such as 'debt ratio'. A multifaceted study of corporate default prediction models is essential to ensure diverse interests, to avoid situations like the 'Lehman Brothers Case' of the global financial crisis, to avoid total collapse in a single moment. The key variables used in corporate defaults vary over time. This is confirmed by Beaver (1967, 1968) and Altman's (1968) analysis that Deakins'(1972) study shows that the major factors affecting corporate failure have changed. In Grice's (2001) study, the importance of predictive variables was also found through Zmijewski's (1984) and Ohlson's (1980) models. However, the studies that have been carried out in the past use static models. Most of them do not consider the changes that occur in the course of time. Therefore, in order to construct consistent prediction models, it is necessary to compensate the time-dependent bias by means of a time series analysis algorithm reflecting dynamic change. Based on the global financial crisis, which has had a significant impact on Korea, this study is conducted using 10 years of annual corporate data from 2000 to 2009. Data are divided into training data, validation data, and test data respectively, and are divided into 7, 2, and 1 years respectively. In order to construct a consistent bankruptcy model in the flow of time change, we first train a time series deep learning algorithm model using the data before the financial crisis (2000~2006). The parameter tuning of the existing model and the deep learning time series algorithm is conducted with validation data including the financial crisis period (2007~2008). As a result, we construct a model that shows similar pattern to the results of the learning data and shows excellent prediction power. After that, each bankruptcy prediction model is restructured by integrating the learning data and validation data again (2000 ~ 2008), applying the optimal parameters as in the previous validation. Finally, each corporate default prediction model is evaluated and compared using test data (2009) based on the trained models over nine years. Then, the usefulness of the corporate default prediction model based on the deep learning time series algorithm is proved. In addition, by adding the Lasso regression analysis to the existing methods (multiple discriminant analysis, logit model) which select the variables, it is proved that the deep learning time series algorithm model based on the three bundles of variables is useful for robust corporate default prediction. The definition of bankruptcy used is the same as that of Lee (2015). Independent variables include financial information such as financial ratios used in previous studies. Multivariate discriminant analysis, logit model, and Lasso regression model are used to select the optimal variable group. The influence of the Multivariate discriminant analysis model proposed by Altman (1968), the Logit model proposed by Ohlson (1980), the non-time series machine learning algorithms, and the deep learning time series algorithms are compared. In the case of corporate data, there are limitations of 'nonlinear variables', 'multi-collinearity' of variables, and 'lack of data'. While the logit model is nonlinear, the Lasso regression model solves the multi-collinearity problem, and the deep learning time series algorithm using the variable data generation method complements the lack of data. Big Data Technology, a leading technology in the future, is moving from simple human analysis, to automated AI analysis, and finally towards future intertwined AI applications. Although the study of the corporate default prediction model using the time series algorithm is still in its early stages, deep learning algorithm is much faster than regression analysis at corporate default prediction modeling. Also, it is more effective on prediction power. Through the Fourth Industrial Revolution, the current government and other overseas governments are working hard to integrate the system in everyday life of their nation and society. Yet the field of deep learning time series research for the financial industry is still insufficient. This is an initial study on deep learning time series algorithm analysis of corporate defaults. Therefore it is hoped that it will be used as a comparative analysis data for non-specialists who start a study combining financial data and deep learning time series algorithm.

A Study on the Financial Strength of Households on House Investment Demand (가계 재무건전성이 주택투자수요에 미치는 영향에 관한 연구)

  • Rho, Sang-Youn;Yoon, Bo-Hyun;Choi, Young-Min
    • Journal of Distribution Science
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    • v.12 no.4
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    • pp.31-39
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    • 2014
  • Purpose - This study investigates the following two issues. First, we attempt to find the important determinants of housing investment and to identify their significance rank using survey panel data. Recently, the expansion of global uncertainty in the real estate market has directly and indirectly influenced the Korean housing market; households demonstrate a sensitive reaction to changes in that market. Therefore, this study aims to draw conclusions from understanding how the impact of financial strength of the household is related to house investment. Second, we attempt to verify the effectiveness of diverse indices of financial strength such as DTI, LTV, and PIR as measures to monitor the housing market. In the continuous housing market recession after the global crisis, the government places top priority on residence stability. However, the government still imposes forceful restraints on indices of financial strength. We believe this study verifies the utility of these regulations when used in the housing market. Research design, data, and methodology - The data source for this study is the "National Survey of Tax and Benefit" from 2007 (1st) to 2011 (5th) by the Korea Institute of Public Finance. Based on this survey data, we use panel data of 3,838 households that have been surveyed continuously for 5 years. We sort the base variables according to relevance of house investment criteria using the decision tree model (DTM), which is the standard decision-making model for data-mining techniques. The DTM method is known as a powerful methodology to identify contributory variables for predictive power. In addition, we analyze how important explanatory variables and the financial strength index of households affect housing investment with the binary logistic multi-regressive model. Based on the analyses, we conclude that the financial strength index has a significant role in house investment demand. Results - The results of this research are as follows: 1) The determinants of housing investment are age, consumption expenditures, income, total assets, rent deposit, housing price, habits satisfaction, housing scale, number of household members, and debt related to housing. 2) The impact power of these determinants has changed more or less annually due to economic situations and housing market conditions. The level of consumption expenditure and income are the main determinants before 2009; however, the determinants of housing investment changed to indices of the financial strength of households, i.e., DTI, LTV, and PIR, after 2009. 3) Most of all, since 2009, housing loans has been a more important variable than the level of consumption in making housing market decisions. Conclusions - The results of this research show that sound financing of households has a stronger effect on housing investment than reduced consumption expenditures. At the same time, the key indices that must be monitored by the government under economic emergency conditions differ from those requiring monitoring under normal market conditions; therefore, political indices to encourage and promote the housing market must be divided based on market conditions.

Further Investigations on the Financial Characteristics of Credit Default Swap(CDS) spreads for Korean Firms (국내기업들의 신용부도스왑(CDS) 스프레드의 재무적 특성에 관한 심층분석 연구)

  • Kim, Han-Joon
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.13 no.9
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    • pp.3900-3914
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    • 2012
  • This study examined the background of the recent global financial crisis and the concept of one of the financial derivatives such as the credit default swap(CDS) or synthetic CDO(collateral debt obligations), given the rapid growing and changing the over-the-counter derivative markets in their volume and structures. In comparison with the previous literature such as the study of Park & Kim (2011), this research empirically performed more thorough and comprehensive investigations to find any financial characteristics or attributes to determine the CDS spreads. Regarding the results obtained from the multiple regression models, the explanatory variables such as STYIELD3, SLOPE, INASSETS, and VOLATILITY, showed their statistically significant effects on all the tested dependent variables(DVs). Another procedure such as the principle component analysis(PCA), was also performed to account for additional IDVs as possible determinants of the dependent variables. Subsequent to this analysis, larger coefficients of each corresponding eigenvector such as BETA, PFT2, GROWTH, STD, and BLEVERAGE were found to be possible financial determinants. For robustness, all the IDVs were employed to be tested in the 'full' regression model with stepwise procedure. As a result, STYIELD3, SLOPE, and VOLATILITY, and BETA showed their statistically significant relationship with all the dependent variables of the CDS spreads.

Study on Poverty of the Middle Aged Men Living in Chokbang Area (쪽방거주 중고령 남성의 빈곤 사례연구)

  • Kim, Dong-Seon;Mo, Seon-Hee
    • The Journal of the Korea Contents Association
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    • v.20 no.5
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    • pp.222-235
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    • 2020
  • This study examines the poverty progress and its factors which drove the lives of the middle-aged men in Chokbang area. The observed examples are the retired government officials and the self-employed who have been classified as the ones in the economically-middle class but currently as the welfare recipients. According to the results of in-depth interview and observation, the poverty of the observed has undergone the progress of trigger, worsening, breakup, desperation and stabilizing stages. The poverty factors found in this study could be categorized into two factors; circumstantial factors(bankruptcy after IMF, debt guarantee for relatives) and inner factors(the participants' behavior and characteristics). The circumstantial factors worked mainly in the trigger stage and the inner factors contributed to worsening economic crisis and facilitating the progress. According to the result, this study suggests not only individual-scale measures such as encouragement of familial bond or medical treatment of the alcoholism but also social measures including proper regulation of shark loan and opportunity supply to exit from poverty.

The Contents of Jubilee Education for Jubilee Justice (주빌리 정의를 위한 주빌리 교육의 내용)

  • Yoo, Eunju
    • Journal of Christian Education in Korea
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    • v.62
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    • pp.285-311
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    • 2020
  • Many people are suffering from the economic crisis and poverty that are deepening due to the recent spread of the COVID-19 epidemic. In this situation, this study focuses on the biblical Jubilee in order to seek how "Jubilee justice" can be realized in the modern context. The Law of Jubilee consists of four contents: the liberation of slaves, debt remission, land return and fallow. Ultimately it aims to prevent human slavery and preserve equality. Nevertheless, the thought of Jubilee has been distorted theologically and situationally, and as a result, it has been overlooked in the field of Christian education, and there is a limit in Christian practice for social justice. The thought of Jubilee, however, can be an alternative to overcome various problems of modern society such as the issue of the privatization of Christianity or the deepening of polarization caused by neoliberal globalization and can contribute positively to the practice of social justice. In other words, the thought of Jubilee can act as a biblical initiative in reforming wrong laws and establishing institutions for the poor on the institutional level; on the personal level, it can be a great motive in terms of the change of perception and the practice of the sharing economy. Jubilee education, which aims for Jubilee justice, helps to break the misconceptions and change the existing meaning perspectives on the basis of various interdisciplinary knowledge and supports social behavior for transforming social structure through activation of public opinion and fund raising at the practical level. Therefore, the learners of Christian education can play a public role in transforming the unjust society.

Success Factors of German Mittelstand as a Role Model for Korean Exporting SMEs (한국 수출중소기업 롤 모델로서 독일 미텔슈탄트의 성공요인 분석)

  • Hong, Song-Hon
    • International Commerce and Information Review
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    • v.15 no.4
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    • pp.341-366
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    • 2013
  • The term, Mittelstand, has no exact english translation for the definition, but, today, Mittelstand refers to small and medium-sized enterprises(SME), mostly family-owned firms in Germany. The Mittelstand is called the backbone of the German economy because it drove the economic miracle after World War II. During the global recession and the euro zone's debt crisis in recent years, in which european businesses have faced the near-collapse of competitiveness particularly in manufacturing, the German exports are booming and exceeded exports of China in 2012. Most importantly, the Germany economic performance has been widely attributed to the strength of the Mittelstand. Many of countries, even some leading public companies are seeking to emulate the success of the Mittelstand. Investors evaluate that many of Germany's investable "hidden champions" are Mittelstand companies. The purpose of this study is to present some of answers to the following questions: Firstly, what makes the German Mittelstand so successful? Secondly, what does the success of the German Mittelstand mean for the Korean SMEs in global competitiveness? Thirdly, what Korean government has to do improve the global competitiveness of the Korean SMEs? Some discussions in this study mention the managerial implications for Korean exporting SMEs particularly in manufacturing. Several factors that account for the success of the German Mittelstand are technological excellence and the tradition of family-owned management, concentration on niche market and globalization, and institutional supports. There are some of important lessons to be learned from the German Mittelstand. If the purposes of Korean SMEs want to remain in the sustainable competitive advantage and withstand unforeseen economic turbulences in the future, they must be able to meet the followings: 1) Technology that meets the global standard or exceeding it 2) Competitiveness in price in the global market 3) Active involvement in the globalization process, utilizing various entry modes Innovative products at globally competitive price are a crucial point for Korean exporting SMEs to achieve their competitive edge over others in the target markets abroad. It is time for Korean SMEs to cultivate a core competence in manufacturing in order to position Korea as a global manufacturing hub with SMEs leading.

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