• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.39
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• pp.105-142
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• 2008

For many companies, selling in an international market place is the ultimate challenge. One of the greatest problems facing exporters is the increasing insistence by importers that trade be conducted on open account terms. This often means that payment is received many weeks or even months after delivery. Unsurprisingly, many organisations find that giving buyers credit in this way can cause severe cash flow problems. Further problems can arise if the importer delays payment beyond originally agreed terms or makes no payment at all because of financial failure. In particular, many SMEs find it difficult to finance their production cycle, since after goods are delivered most buyers demand 30 to 90 days to pay. Therefore, International factoring for SME has been developing very rapidly in the world trade financing markets. Functions of international factoring as trade financing is a comprehensive financial service that includes credit protection, accounts receivable bookkeeping, collection services and financing. Factoring can be a powerful tool in providing financing to high-risk, informationally opaque sellers. International factoring is very helpful for international exporters to get competitiveness in the world markets. In Korea, a few banks are operating international factoring. But International factoring in Korea could not play a key roll as general trade supporting service. So, This study is to suggest importances of international factoring development for trade development and to investigate real operation situations and problems by way of interviews with operators in banks that are operating international factoring and suggest development strategies for international factoring in Korea.

• Journal of Korea Trade
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• v.26 no.1
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• pp.20-32
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• 2022

Purpose - This paper intends to make theoretical analysis and empirical test on the factors influencing China's export to South Korea, and draw conclusions about China's export efficiency and trade potential. Based on the conclusions, the reasons for China's trade deficit with South Korea are found, and a solution is put forward for solving the problem of China's trade deficit with South Korea. Design/methodology - Based on the data of 2004-2017 years in China, this paper uses the stochastic frontier gravity model to analyze the influencing factors of China's export to South Korea, as well as the export efficiency of each province and the export potential that can be explored. Findings - First, in terms of the factors affecting China's export trade to South Korea, the GDP of the provinces and cities in China, the FDI of South Korea to the provinces and cities in China, the GDP of South Korea, the population and education level of provinces and cities in China can significantly promote the export scale of Chinese provinces and cities to South Korea. The distance between Chinese provincial capitals and the South Korean capital significantly hinders Chinese exports to South Korea; Second, in terms of export trade efficiency, the trade exchange rate of the economically developed cities along the eastern coast of China and several provinces that are close to South Korea is higher than that of the cities in the central and western regions; Third, economic globalization makes trade more convenient, the average export trade efficiency of China's exports to South Korea showed an upward trend. However, under the influence of the 2008 global financial crisis, the export trade efficiency declined from 2008 to 2009, indicating that the impact of the financial crisis on the trade efficiency cannot be ignored. Originality/value - This paper finds out the influencing factors of China's export to South Korea, analyzes the export efficiency of different provinces and cities, excavates the export potential, and puts forward some suggestions for the balanced development of China and South Korea trade in the next step.

• International Area Studies Review
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• v.20 no.4
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• pp.57-72
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• 2016

This Paper investigates the role of wealth distributions and Financial institutions of an economy on within-industry firm heterogeneity in productivity. If there is no Financial imperfection so that entrepreneurs are not constrained in borrowing all of them make the same, productivity-enhancing investment. International Trade industry average productivity also increases the avoidance of capital and international capital movements developing countries linked by lead industry cuts in global investing. International Trade of goods, on the other hand, amplifies this impact of capital mobility when capital structures the countries.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.469-477
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• 2021

In this paper, the relationship between the profitability level of an enterprise and the credit policy adopted by an enterprise was measured. A sample of industrial firms listed on the stock exchanges of Iraq, Jordan, and Kuwait was analyzed. Five industrial firms were randomly selected from each exchange with a condition of having at least 5 year-activity. The total sample size was 15 industrial firms. The study financial data was imported from the sample firms' websites. The financial data was for the financial year 2017. The Regression Analysis was adopted to measure the impact of trade credit on the profitability of an enterprise using the SPSS software. It was found that the receivable accounts have a proportional relationship with the turnover property rights rate. Similarly, the statistical results showed that the turnover property rights rate increased with an increase in the turnover receivable accounts rate and the percentage of investment in receivable accounts. The influence of trade credit on the enterprise profitability percentage in the Iraq stock exchange, Amman stock exchange, and Boursa Kuwait were 0.938, 0.200, and 0.089, respectively. The results showed that the three secondary assumptions were incorrect, while the zeroth assumption, i.e., trade credit has no influence on profitability, was correct.

• Korea Trade Review
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• v.45 no.5
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• pp.1-22
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• 2020

This study explores the role of relationship banking for the exports of SMEs (small and medium sized enterprises) in Korea. Using a sample of SMEs listed on the Korean stock markets between 2004 and 2018, I find that relationship banking has a positive impact on exporting behaviors of SMEs. This result indicates that relationship banking is suitable for SMEs to raise their funds in the export decision-making since the incentive for banks to obtain soft information enhances SMEs' access to external finance. In particular, through further analysis considering financial constraints, I find that the positive impact of relationship banking on exports is amplified for financially constrained SMEs. In addition, the positive impact on exports is also amplified for export starters. Finally, relationship banking provides benefits for SMEs' export decision-making regardless of the financial crisis. To sum up, relationship banking may be useful means of financing for Korean SMEs whose creditworthiness cannot be assessed only by hard information. As the role of finance in international trade has recently been highlighted, this study provides insightful evidence that relationship banking may enhance exports of SMEs as a source of trade finance.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.4
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• pp.643-651
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• 2021

This study aims to determine the response of regional economic growth to the financial performance of regional economies in regard to the liquidity conditions, saving-investment gaps, trade openness, inflation, as well as the national economic growth. The basic logic theory of research uses the principles of open economics and financial intermediary systems. The data used in this study are secondary data, and the form of data is a quarterly time series for the period from 2008 to 2019. The data were obtained from various publications, such as the Central Statistics Agency (CSA), Regional Financial Economics Statistics (RFES), Indonesian Banking Statistics (IBS), and the Financial Services Authority (FSA). Data processing was done through VAR/VECM analysis; short-term and long-term equilibrium analyses were carried out. The results of the analysis illustrate that regional economic growth and the conditions of liquidity, saving-investment gaps, trade openness, inflation, and national economic growth are related and lead to significant impact variations in the provinces of Papua and West Papua. In conclusion, the findings of this research support the leading supply hypothesis and reformulate the strategy and policy of economic development, bearing in mind that there are still many underdeveloped districts in these two provinces.

• Korea Trade Review
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• v.46 no.5
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• pp.131-152
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• 2021

Political connections may facilitate firms' exporting activities, particularly in developing countries, because politically connected firms may be more likely to receive informational and financial support, allowing them to overcome barriers to export. We test this hypothesis using a unique, firm-level dataset from traditional apparel and textile clusters in the Red River Delta Region in Northern Vietnam. We find that political connection of certain types increases the chance of receiving valuable information or financial support from the government. Moreover, those firms that have access to government information have higher chances of being direct exporters. However, firms that receive financial support from the government are not necessarily engaged in exporting activities. Although politically connected firms are more willing to export, they do not necessarily engage in more exporting activities than firms without such connections. These results suggest that the misallocation of information and financial resources to politically connected but insufficiently productive firms leads to a failure to promote exporting activities. In contrast, political connection increases the chance of importing materials and parts, possibly because high productivity is necessary for exporting, but not for importing.

• Journal of Korea Trade
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• v.25 no.3
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• pp.65-86
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• 2021

Purpose - This paper empirically investigates the relationship between the corporate value chain and performance of non- financial businesses of South Korean stock market companies. It aims to explore the evidence that can be used to infer the relationship between value chains and corporate performance in the case of firms forming a value chain with other companies with the means of an equity investment or a special business relationship. Design/methodology - Non-financial corporations listed from 2011 to 2017 on the securities market of South Korea are analyzed. The data used for analysis are found for transactions with the related party by year for all the corporations of non-financial industries in the securities market. Multiple analysis attempts are conducted including the relationship between the value chain and productivity, corporate value, risk-adjusted corporate value, and mediation effects of productivity. The empirical model employs sixteen variables including the value chain index which identifies its impact on various aspects of business performances. Findings - The results of this study clearly supports the phenomenon that corporate productivity and value are enhanced when the corporation expands its value chain established with domestic related firms and overseas companies. Such a positive effect is statistically significant even after the possible risk factors that accompany the expansion of value chain were considered, and productivity plays the role as a medicating variable in the effect of the value chain on the corporation values. Originality/value - The findings of this study confirms that domestic companies' expansion of their value chain centered on the related firms overseas that helped them in terms of the maximization of their productivity and corporate values. This study shows that Korean government's policy on expanding the corporate GVC can enhance the productivity and value of firms. The expansion of value chain and its impact on business performance has not been explored thoroughly, although it is getting more and more important in the global trade operation.

• East Asian Economic Review
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• v.22 no.3
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• pp.275-306
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• 2018

Amid a general rise in protectionism and a trade war between the world's two largest economies, this paper analyzes changes in gains from trade for the world over a decade marked by rapid global economic integration preceding the global financial crisis of 2007-08. It employs state-of-the-art quantitative trade models based on the gravity equation to estimate autarky gains from trade, as well as a recently introduced ANOVA-type structural estimation of the gravity equation to obtain trade costs free of residual trade cost bias. Between 1995 and 2006, the cost of moving to autarky increased by about 45% on average. A decomposition exercise suggests most of the increase in autarky gains from trade on average was due to increases in import shares in total spending, with a limited role for reallocations of spending across sectors with varied trade elasticities. Changes in trade costs between 1995 and 2006 are found to have increased autarky gains from trade, as measured in 2006, by up to 100%.

• Journal of Korea Trade
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• v.23 no.5
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• pp.129-144
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• 2019

Purpose - Recent empirical studies have reached mixed results on the effects of financial liberalization and currency crises. We argue that this relationship is likely to depend both on whether controls are primarily on the degrees of financial liberalization and on the stability of the government. Using the disaggregated data on financial liberalization recently developed by Abiad et al (2010) for a sample of 30 emerging countries over the period 1995-2015, we attempt to investigate the political economy determinants of currency crises. Design/methodology - Our empirical model considers the relationship between financial liberalization and currency crises for emerging market economies. This study employs the existing theoretical framework to identify the disaggregate level for financial liberalization across countries. Using a multivariate logit model, this study attempts to estimate the interrelationship among financial liberalization, government stability and currency crises complemented by a case study of South Korea. Findings - Our main findings can be summarized as follows: we find strong support for the proposition that more liberalized financial institutions are positively associated with the probability of currency crises especially under less stable governments, but reduce the risks of currency crises especially for more stable governments. We also examine the role of financial systems with the case of South Korea after Asian financial crises and the results are further supported and consistent with the empirical findings. Originality/value - Existing studies focus on the economic factors across countries. This paper instead attempts to evaluate the effects of financial liberalization and currency crises by incorporating political considerations with newly developed dataset on financial liberalization, which are essential to the understanding of the causes of currency crises.