• Title/Summary/Keyword: Government Debt

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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 Characteristics of Foreign Portfolio Investment (외국인 포트폴리오 투자의 특징)

  • Gong, Jai-Sik;Kim, Choong-Hwan
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.12 no.1
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    • pp.216-221
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    • 2011
  • After the year of 2000, the Korean government has abolished the limit on foreign investments. Foreign investments in the domestic market have been thriving since. In domestic stock market, the proportion of market value held by foreign investors reaches over 40%. There are many followers in the markets, asking about what kinds of the firm that foreign investors prefer. Prior researches show that foreign investors in the American and European markets prefer stocks of the firm which are well known and are geographically closer. In this paper, we attempt to define the financial characteristics of the firms in which foreigners invest in the Korean market. The result shows that foreign investors in the domestic market tend to prefer firms with high market value of capital and dividend yield. It also shows that foreign investors in the Korean market choose firms with high book value to market value over others, while the firms with high debt ratio and the portion of the largest stock holders are shunned. This research suggests that foreign portfolio investments in the Korean market have contributed to liquidity of stock market and changed the governance structure of domestic firms in a positive way.

An Empirical Study on the Relationship Between Firm Characteristics, Financial Security Indices, and Financial Profit Indices of Korean Private Venture Capital Firms (창업투자회사의 특성과 재무안정성 및 수익성지표 간의 관계에 대한 실증적 연구)

  • Lee, Joo-Heon;Kim, Sung-Min
    • Korean Business Review
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    • v.19 no.1
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    • pp.157-174
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    • 2006
  • In the past, because Korean private venture capital firms could get government support and subsidies, they could be survived in the market without having required management capabilities, advanced venture investment techniques, and professional supporting agencies and institutions. However, business environments have changed a lot recently. Now, only through identifying the optimal financial structures(the ratio of debt to equity), Korean private venture capital firms can minimize investment risks and ensure higher profits. Since Modigliani and Miller(1958) criticized the existence of the optimal financial structure, there have been numerous studies on the optimal financial structure of firms. However, there is no empirical study investigating the financial structure of venture capital firms. The purpose of this article is to analyze the relationship between firm characteristics, financial security indies, and financial profit indices of korean private venture capital firms. We gathered the data from various sources, including the web pages and the financial statements for 2003 and 2004. By using the student's t-test and the correlation analysis, we showed that there are differences in the current ratio and the ratio of net profit to net sales between new and old korean private venture capital firms. Even though it is known that korean private venture capital firms does not have enough knowledge and investment technique to compete with global venture capital firms, our result show that old korean private venture capital firms have already built some knowledge and understanding of venture capital investing.

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A Study on Early Termination Payment Option of BTO PPI Projects (BTO 민간투자사업 해지시지급금 매수청구권 가치에 관한 연구)

  • Shin, Sung-Hwan
    • Korean Journal of Construction Engineering and Management
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    • v.12 no.3
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    • pp.121-130
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    • 2011
  • Real option values of early termination payment for selected BTO PPI projects are studied using binomial models. Two cases of early termination payments are considered; an option with the condition of private participants' default, and an option without the condition. Values vary depending upon parameter values such as revenues, costs, discount rates, debt ratio, and volatility of revenues. For selected projects, the option values without the default condition are estimated as 1%~7% of total project costs, whereas the option values with the default condition are estimated as 0%~1.89% of total project cost. When actual revenues differ from the forecasted revenues, apparently the option values deviate from the values based upon the forecasted revenues. When actual revenues fall short of the forecasted revenues, the option values increase by a large amount whereas the option values decrease by a small amount in the opposite case. This implies that the option values can be quite bigger than the values based upon the forecasted revenue especially when the revenue forecast uncertainty is large. This study is expected to play an important role in improving the early termination payment option policy of the government in PPI projects in Korea.

The Effects of Introducing Surety Insurance for Royalty Collection: A Case of R&D Program for Small and Medium-sized Enterprises (기술료 보증보험제도 도입 효과 분석: 중소기업기술혁신개발사업 적용사례)

  • Park, Hyun-Min;Kim, Tae-Sung
    • Journal of Digital Convergence
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    • v.9 no.5
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    • pp.31-43
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    • 2011
  • Since the R&D Program for Small and Medium-sized Enterprises started in 1997 as a part of Small and Medium Business Administration, many companies succeeded to carry out the tasks and were charged royalty fees from the government aid program in return. However, some of them were unable to pay a royalty because of their poor financial positions. Failure to pay a royalty also led to adding administrative duties including debt collection and imposing a penalty of participation restriction for other R&D programs. To solve the problems incurred by a failure of royalty collection, a divided payment using a surety insurance was introduced in 2009. That is, the R&D program recipients who were charged royalties issue surety insurance policies and submit them to a collection agency with a plan of divided payment. In this study, we estimate the main benefits of introducing surety insurance for royalty collection. First, we analyze royalty collection results from recipients supported by the R&D program from 1997 to 2006. By doing so, we calculate the main parameters that will be used for estimating the 2011 collection results. Next, besides estimating the quantitative effect, which summarizes an increase of royalty collection via surety insurance, we also analyze various qualitative effects such as simplification of the collection process and expansion of opportunities for participation in R&D programs.

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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Perception Analysis between Consumers and Experts to solutions about unsold housing in the Metropolitan area of South Korea (수도권 미분양 주택 감소방안에 대한 수요자와 전문가 의식분석)

  • Lee, Yun-Hong;Lee, Joo-Hyung
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.14 no.9
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    • pp.4514-4523
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    • 2013
  • Currently the number of unsold housing is rapid increasing over again in the Seoul Metropolitan area. So this research analyzed effective and possible solutions focus on the potential customers and professionals. There was a research method setting up alternative solutions from the existing researches and the other suggestions though FGI (Focus Group Interview) by professionals. And then it investigated the efficient ways to resolve those problems through Conjoint Analysis. According to the result of this paper, firstly the customers considered 'financial supports', 'self-rescue efforts for construction companies' and 'taxation support' than the other. On the other hand, professionals evaluated 'publicly purchased housing' and 'new housing policies' were more essential solutions besides, both of them recognized the importance of ;financial support'. Secondly there were some ideas that it was necessary to more less control LTV (Loan to Value ratio) and DIT ( Debt to Income) and the LH (Korea Land and Housing Corporation) buy unsold housing. Finally the government and housing association had to manage and intervene the supply of housing within metropolitan area and restrict to building new properties and the construction companies actively provide less strict standard terms and conditions in contract for purchasing housing for instance, the decline of housing sale price or interest-free and so on.

Financial Analysis on Changes in Profitability for Chaebol Firms in the Post-period of the Global Financial Turmoil (국제금융위기 이후 국내 재벌 계열사들의 수익성 변화요인에 대한 재무분석)

  • Kim, Hanjoon
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.20 no.5
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    • pp.352-362
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    • 2019
  • The study investigates one of the long-standing, but still controversial issues in modern finance from the international and domestic perspectives. That is, financial components and differences on corporate profitability are identified and compared under the primary hypotheses. Empirical research settings include the sample data as KOSPI-listed chaebol firms, time reference covering the post-era of the global financial turmoil and two differently defined profitability indices measured by the market- and the book-value bases. A majority of total 7 explanatory variables except firm size and leverage ratio reveal their statistically significant power to explain profitability indices for the chaebol firms in the first hypothesis. The results are generally compatible with those obtained from their counterparts of non-chaebol firms. In the second hypothesis applying multinomial logistic model, the chaebol firms are classified into three groups according to the level of profitability. It is then confirmed that variables to represent the market-valued debt ratio, business risk and growth potential are financially discriminating factors among the three groups. The study may provide a new vision to identify financial factors of corporate profitability for Korean chaebol firms after the global financial crisis, which can enhance the benefits of interested parties at the government or corporate level in a virtuous cycle.

An Analysis on the Effect of Japanese Monetary Policy in 21C (21c 일본 통화정책 효과에 대한 분석)

  • Yoon, Hyung-Mo
    • International Area Studies Review
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    • v.20 no.1
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    • pp.105-125
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    • 2016
  • The expansionary monetary policy was practiced after 2001 in Japan to treat the deflation spiral, and reduced only the nominal interest rates and domestic household demand. One of the most serious factors for this failure was the change of private sector's expectancy. This paper has studied the effect of Japanese monetary policy in 21c., with empirical research based on a renewed macroeconomic model and the VAR. The empirical analysis shows that the effect of monetary policy on the national income during 2001.01-2015.03 is weaker than that of 1985.01-1994.04. Money volume has a diminutive effect on the growth of GDP within a short term after 2001. The change in the expectations of the private sectors might have been the cause of ineffectiveness of the expansive monetary policy. Economic agents learned from the past Japanese financial crisis that an expansive monetary policy increased the inflation rate and caused the 'bubbles to burst' afterwards. The VAR analysis says that the effectiveness of monetary policy on the economic depression declined over the past 20 years and the expansion of money volume has no influence on exchange rate and net export. This means that the expansive monetary policy lost its effect on net export and national income steadily. Monetary policy makers have to recognize this fact, and to consider another anti-cycle political instrument, i.e. the fiscal policy with government debt.

The Concentration of Economic Power in Korea (경제력집중(經濟力集中) : 기본시각(基本視角)과 정책방향(政策方向))

  • Lee, Kyu-uck
    • KDI Journal of Economic Policy
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    • v.12 no.1
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    • pp.31-68
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    • 1990
  • The concentration of economic power takes the form of one or a few firms controlling a substantial portion of the economic resources and means in a certain economic area. At the same time, to the extent that these firms are owned by a few individuals, resource allocation can be manipulated by them rather than by the impersonal market mechanism. This will impair allocative efficiency, run counter to a decentralized market system and hamper the equitable distribution of wealth. Viewed from the historical evolution of Western capitalism in general, the concentration of economic power is a paradox in that it is a product of the free market system itself. The economic principle of natural discrimination works so that a few big firms preempt scarce resources and market opportunities. Prominent historical examples include trusts in America, Konzern in Germany and Zaibatsu in Japan in the early twentieth century. In other words, the concentration of economic power is the outcome as well as the antithesis of free competition. As long as judgment of the economic system at large depends upon the value systems of individuals, therefore, the issue of how to evaluate the concentration of economic power will inevitably be tinged with ideology. We have witnessed several different approaches to this problem such as communism, fascism and revised capitalism, and the last one seems to be the only surviving alternative. The concentration of economic power in Korea can be summarily represented by the "jaebol," namely, the conglomerate business group, the majority of whose member firms are monopolistic or oligopolistic in their respective markets and are owned by particular individuals. The jaebol has many dimensions in its size, but to sketch its magnitude, the share of the jaebol in the manufacturing sector reached 37.3% in shipment and 17.6% in employment as of 1989. The concentration of economic power can be ascribed to a number of causes. In the early stages of economic development, when the market system is immature, entrepreneurship must fill the gap inherent in the market in addition to performing its customary managerial function. Entrepreneurship of this sort is a scarce resource and becomes even more valuable as the target rate of economic growth gets higher. Entrepreneurship can neither be readily obtained in the market nor exhausted despite repeated use. Because of these peculiarities, economic power is bound to be concentrated in the hands of a few entrepreneurs and their business groups. It goes without saying, however, that the issue of whether the full exercise of money-making entrepreneurship is compatible with social mores is a different matter entirely. The rapidity of the concentration of economic power can also be traced to the diversification of business groups. The transplantation of advanced technology oriented toward mass production tends to saturate the small domestic market quite early and allows a firm to expand into new markets by making use of excess capacity and of monopoly profits. One of the reasons why the jaebol issue has become so acute in Korea lies in the nature of the government-business relationship. The Korean government has set economic development as its foremost national goal and, since then, has intervened profoundly in the private sector. Since most strategic industries promoted by the government required a huge capacity in technology, capital and manpower, big firms were favored over smaller firms, and the benefits of industrial policy naturally accrued to large business groups. The concentration of economic power which occured along the way was, therefore, not necessarily a product of the market system. At the same time, the concentration of ownership in business groups has been left largely intact as they have customarily met capital requirements by means of debt. The real advantage enjoyed by large business groups lies in synergy due to multiplant and multiproduct production. Even these effects, however, cannot always be considered socially optimal, as they offer disadvantages to other independent firms-for example, by foreclosing their markets. Moreover their fictitious or artificial advantages only aggravate the popular perception that most business groups have accumulated their wealth at the expense of the general public and under the behest of the government. Since Korea stands now at the threshold of establishing a full-fledged market economy along with political democracy, the phenomenon called the concentration of economic power must be correctly understood and the roles of business groups must be accordingly redefined. In doing so, we would do better to take a closer look at Japan which has experienced a demise of family-controlled Zaibatsu and a success with business groups(Kigyoshudan) whose ownership is dispersed among many firms and ultimately among the general public. The Japanese case cannot be an ideal model, but at least it gives us a good point of departure in that the issue of ownership is at the heart of the matter. In setting the basic direction of public policy aimed at controlling the concentration of economic power, one must harmonize efficiency and equity. Firm size in itself is not a problem, if it is dictated by efficiency considerations and if the firm behaves competitively in the market. As long as entrepreneurship is required for continuous economic growth and there is a discrepancy in entrepreneurial capacity among individuals, a concentration of economic power is bound to take place to some degree. Hence, the most effective way of reducing the inefficiency of business groups may be to impose competitive pressure on their activities. Concurrently, unless the concentration of ownership in business groups is scaled down, the seed of social discontent will still remain. Nevertheless, the dispersion of ownership requires a number of preconditions and, consequently, we must make consistent, long-term efforts on many fronts. We can suggest a long list of policy measures specifically designed to control the concentration of economic power. Whatever the policy may be, however, its intended effects will not be fully realized unless business groups abide by the moral code expected of socially responsible entrepreneurs. This is especially true, since the root of the problem of the excessive concentration of economic power lies outside the issue of efficiency, in problems concerning distribution, equity, and social justice.

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