• Journal of the Korean Geographical Society
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• v.31 no.3
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• pp.489-507
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• 1996

The purpose of this study is to examine the increasing number of unregistered manufacturing plants and related problems, and to recommend alternative solutions to the problems. Data are obtained from a field survey of randomly selected small scale manufacturing plants in Seoul and its suburban cities. A total number or respondents are 533, and 416 of them are unregistered plants. The Capital Regional Planning has had a goal during last three decades to lead a balanced regional economic development by restriction manufacturing plants in the Capital Region and by encouraging them in other regions in the nation. It was 1984 when a comprehensive planning was established to achieve this goal. Sets of various regulations, by-laws and codes have been implemented to regulate manu-facturing activities in the Capital Region to achieve the goal. The region is divided into three sub-regions, and a different degree of regulations is applied to each sub-region. Only a certain types of industries are allowed in a particular sub-region. For instance, a plant manufacturing high-technology products could be allowed in the most urbanized sub-region. All manu-facturing plant in the Capital Region which has ares size of larger than 200"\;"$m^2$ is compulsory to register to the local government office. In practice, however, it is not common or sometimes almost impossible to get approval for many applicant manufacturers because of strict regulations. There have been increasing number of plants in the Capital Region during last several decades, despite the strict regulations. Many of those newly established plants are without formal registration at the local administration office. howerver. These are so called 'unregisterd' plants. Surveyed data and many government official data show that many of unregistered plants have been established in recent years. which indicate that current regulations are no longer effective. The number of unregistered plants are increasing tin the Capital Region because of many locational advantages in the region for plants, particularly those in small scale. Unregistered plants are the source of many problems, such as local water pollution or noise pollution in residential areas. There are also many administration problems, bed\cause they are not registered. The central government has attempted to cure the problems of unregistered plants. For example, the government allowed a unregistered plant to remain at present site for three ydars, if it met certain conditions in three years. However, this program was unsuccessful because many of those plants were not able to meet the concitions. Three times the government renewed the term for those which did not meet conditions since 1989, but it was afraid to be without success. There are many evidences that current policies to control manufacturing plants are not effective. The Capital Region must face mounting problems if ploicies are not reformed soon. This study suggests that the policy of the Capital Regional Planning has to be reoriented to provide more favorable policies for manufacturing plants in the Capital Region than current regulations which is aimed to restrict manufacturing activities. It is time to improve many existing problems in the region through reforms and of current regulations to foster unregistered plants. This study also proposes many smaller-area sub-divisions instead of current three large area sub-regions which is too broad to apply single kind of regulation, or codes. Flexible regulations and codes can be applied to such a small-area sub-divivisions based on location and industrial characteristics of the individual sub-divisions. It is necessary to provide decent industrial environment in the Capital Region, which is best equipped to provide many favorable industrial locational factors in the nation, thus this nation can be further prepared to compete in an inter-national market at an era of globalization in manufacturing.

• KDI Journal of Economic Policy
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• v.34 no.3
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• pp.31-65
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• 2012

We study the sustainability of the current fiscal policy of Korea, and the effects of the social welfare policy expansion, which has been recently discussed among the political circles, on the government budget and the generational equity, using generational accounting. We follow the generational accounting approach, considering the fact that most of the social welfare policies are the entitlement programs, which imposes the limitation of the policy maker's discretion to control the cost of their provision. The social welfare expenditure will change due to the change in the policy environments of the future, such as population aging. Therefore, we need to take into account the government cash flow of the future as well as of the present to investigate its effects on the fiscal sustainability, which implies that the national debt or the budget balance is not a proper index for the investigation. Our findings are as follows. The current fiscal policies are not sustainable, and the long-term budgetary imbalance is shown very serious. The required tax adjustment, which is defined as the percentage change of tax burden required to attain the long-term budgetary balance, is very large. Unless the level of the government expenditure is properly controlled, the tax burden and the social contribution level will rise to the untolerable level. Moreover, the expansion of the social welfare policies, which has been discussed among the political circles, will substantially increase the fiscal burden of the future generations. Even though the provision of the free lunch to the primary and the secondary school students, the free child care, and the discounted college tuition do not increase the fiscal burden much, because their magnitude at present is not large and will decrease due to the decrease in the number of the newborns and the students resulting from the fall in the fertility rate, that of the free health care service will increase tax burden of the future generations very much, because the magnitude of the government expenditure needed at present is very large and the population aging will further increase the magnitude of the health care expenditure. The findings indicate that the structural reforms, to prevent the explosive increase in the social welfare expenditure in the future, are necessary before the implementation of the welfare policy expansion. In particular, the cost control of the social transfers to the elderly needs to be made, because the speed of the population aging of Korea is among the highest in the world. The findings also indicate that the budget balance or the national debt can cause the fiscal illusion, which makes the Korean government budget look sound, even though the fiscal policy will rapidly increase the social welfare expenditure in the future, as the population ages. The generational accounting, which takes into account the cash flow of the future as well as of the present, unlike the budgetary balance and the national debt, which shows the results of the government financial activities of the past and the present, is a useful method to overcome the fiscal illusion.

• Journal of Global Scholars of Marketing Science
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• v.18 no.2
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• pp.65-88
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• 2008

Since the implementation of economic reforms in 1978, the Chinese economy grows rapidly at an average annul growth rate of 9% over the post two decades. Franchising has been widely recognized as an important source of entrepreneurial activity. Trust is important in that it facilitates relational exchanges by permits partners to transcend short-run inequities or risks to concentrate on long-term profits or gains. In the relationship between the franchisors and franchisees, trust has been described as an important source of competitive advantage. However, little research has been done on the factors affecting trust in Chinese franchisor-franchisee relationships. The purpose of this study is to investigate what factors affect the trust in the franchise system in China, and to provide guidelines and insights to franchisors which enter Chinese market. In this study, according to Morgan and Hunt (1994), trust is defined as the extending when one party has confidence in an exchange partner's reliability and integrity. We offered a conceptual model of the empirical study. The model shows that the factors affecting the trust include franchisor's supports, communication, satisfaction with previous outcome and conflict. We also suggested the franchisor's supports and communication like to enhance the franchisee's satisfaction with previous outcome, and the franchisor's supports, communication and he franchisee's satisfaction with previous outcome tend to decrease conflict. Before the formal study, a pretest involving exploratory interviews with owners from three franchisees was conducted to make sure the questionnaire was relevant and clear to the respondents. The data were collected using trained interviewers to carry out personal interviews with the aid of an unidentified, muti-page, structured questionnaire. The respondents comprised of owners, managers, and owner managers of franchisee-owned food service franchises located in Beijing, China. Even though a total of 256 potential franchises were initially contacted, the finally usable sample consisted of 125 respondents. As expected, the sampling method was successful in soliciting respondents with waried personal and firm characteristics. Self-administrated questionnaires were used for all measures. And established scales were used to measure the latent constructs in this study. The measures tapped the franchisees' perceptions of the relationship with the referent franchisor. Five-point Likert-type scales ranging from "strongly disagree" (=1) to "strongly agree" (=7) were used throughout the constructs (trust, eight items; support, five items; communication, four items; satisfaction, six items; conflict, three items). The reliability measurements traditionally employed, such as the Cronbach's alpha, were used. All the reliabilities were greater than.80. The proposed measurement model was estimated using SPSS 12.0 and AMOS 5.0 analysis package. We conducted A series of exploratory factor analyses and confirmatory factor analyses to assess the convergent validity, discriminant validity, and reliability. The results indicate reasonable overall fits between the model and the observed data. The overall fit of measurement model were $X^2$= 159.699, p=0.004, d.f. = 116, GFI =.879, NFI =.898, CFI =.969, IFI =.970, TLI =.959, RMR =.058. The results demonstrated that the data reasonably fitted the model. We also examined construct reliability and reliability and average variance extracted (AVE). The construct reliability of each construct was greater than.80 and the AVE of each construct was greater than.50. According to the analysis of Structure Equation Modeling (SEM), the results of path model indicated an adequate fit of the model: $X^2$= 142.126, p = 0.044, d.f. = 115, GFI =.892, NFI =.909, CFI =.981, IFI =.981, TLI =.974, RMR =.057. As hypothesized, the results showed that it is strategically important to establish trust in a franchise system, and the franchisor's supports, communication and satisfaction with previous outcome tend to reinforce franchisee's trust. The results also showed trust seems to decrease as the experience of conflict episodes increases. And we also noticed that franchisor's supports and communication tend to enhance the franchisee's satisfaction with previous outcome, and communication tend to decrease conflict. If the trust between the franchisor and franchisee can be established in a franchise system, franchising offers many benefits and reduces many costs. To manage a mutual trust of relationship with their franchisees, franchisor's should provide support effectively to their franchisees. Effective assistant services have direct effect on franchisees' satisfaction with previous outcome and trust in franchisor. Especially, franchise sales process, orientation, and training in the start-up period are key elements for success of the franchise system. Franchisor's support is an accumulated separate satisfaction evaluation with different kind of service provided by the franchisor. And providing support definitely can improve the trustworthy image of the franchisor. In the franchise system, conflicts of interests and exertions of different power sources are very common. The experience of conflict episodes seems to negatively relate to trust. Therefore, it is important to reduce the negative side of the relationship conflicts. Communication actually plays a broader role in reducing conflict and establish mutual trust in franchisor-franchisee relationship. And effective communication between franchisors and franchisees can improve franchisees' satisfaction toward the franchise system. As the diversification of Chinese markets, both franchisors and franchisees must keep the relevant, timely, and reliable communication. And it is very important to improve the quality of communication. Satisfaction with precious outcomes seems to positively relate to trust. Franchisors and franchisees that are highly satisfied with the previous outcomes that flow from their relationship will perceive their partner as advancing their goal achievement. Therefore, it is necessary for both franchisor and their franchisees to make the welfare of partner with effort. Little literature has focused on what factors affect the trust between franchisors and their franchisees in China. This study developed the hypotheses regarding the factors affecting trust in the transaction relationship. The results of data analysis supported the hypotheses strongly. There are certain limitations in this study. First, we may point out that some other factors missed in this study could be significantly important. Second, the context of this study, food service industry, limits its potential generalizability for all franchise systems. More studies in different categories of franchise system are needed to broaden its generalizability. Third, the model was tested empirically in a sample in Beijing, more empirical tests of the proposed model in other Chinese areas are needed. Finally, the analysis in this study was solely based on the perception of franchisees and the opinions of franchisors were not included.