• East Asian Economic Review
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• v.26 no.3
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• pp.179-204
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• 2022

This study examines the extent to which policy-based loans to SME exporters affect their export performance (the intensive margin of exports). We also investigate the heterogeneous export effects of policy-based loans that may depend on firm- and industry-specific characteristics, such as credit ratings, debt-to-assets ratios, firm size and age. To do so, we conduct a survey, of 1,000 Korean SMEs, that collect information on firm-level exports and policy-based loans. The main empirical findings strongly support that SMEs that receive policy-based loans tend to increase their export volumes. However, these loans' positive impact on exports are only valid for SME exporters with credit scores of 12 or greater (that is, SMEs that have difficulty accessing the external financial market). The estimation results with respect to SMEs' dependence on external financing imply that policy-based loans for SMEs in sectors that are heavily dependent on external finance are effective in that they are instrumental in increasing these firms' exports. These empirical findings emphasize the importance of the external financial market to SME exporters who face various up-front investments that are related to their exporting activities.

• Communications for Statistical Applications and Methods
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• v.17 no.5
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• pp.697-712
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• 2010

This paper is concerned with the statistical analysis and development of stochastic models for the demand for life insurance policy loans. For these, firstly the characteristics of the regression trend, periodicity and dependence of the monthly demand for life insurance policy loans are investigated by a statistical analysis of the monthly demand data for the years 1999 through 2008. Secondly, the causal relationships between the demand for life insurance policy loans and the economic variables including unemployment rate and inflation rate for the period are investigated. The results show that inflation rate is main factor influencing policy loan demands. The overall evidence, however, failed to establish unidirectional causality relationships between the demand series and the other variables under study. Finally, based on these, univariate time series model and transfer function model where the demand series is related to one input series are derived, respectively, for the prediction of the demand for life insurance policy loans. A statistical procedure for using the model to predict the demand for life insurance policy loans is also proposed.

• International Area Studies Review
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• v.15 no.1
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• pp.173-193
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• 2011

Most of the research regarding economic effects of policy loans has thus far been focused on whether policy loans can improve the financial status or the management performance of small and medium enterprises (SMEs). Unlike previous researches, this study implemented an empirical analysis focused on the contribution of policy loans to easing the liquidity restriction of investment. To analyze whether investment liquidity restriction can be alleviated or not, this study attempted an empirical analysis utilizing the nonlinear Euler equation induced through optimization of investment and GMM (generalized method of moments) as its analysis methodology. With the SMEs that received policy financing from the Small and medium Business Corporation (SBC) in 2004, this study analyzed three years of panel data before(2001~2003) and after(2004~2006) receipt of policy loans. According to the empirical results, it appears that policy loans had effects on resolving liquidity restriction of investment, implying that policy financing eases the liquidity restriction of SME investment and would contribute to the growth and development of SMEs. Further, I checked robustness of empirical results using Tobin's q model. The empirical results also support that policy loans help to resolve liquidity constraint. With these results, it is understood that the critical view to date, which has emphasized the ineffectiveness of policy financing due to it having no or insignificant economic effects, may be wrong.

• Journal of the Korean Operations Research and Management Science Society
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• v.34 no.2
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• pp.1-13
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• 2009

In this paper, we develop theoretical game models to determine the level of government subsidies for banks to provide policy loans to Innovative SMEs(small and medium sized enterprises) through banks, which otherwise would not finance them for the sake of their own profitability. For this, we compare net cash flows of each bank using different strategies against high risk innovative SMEs. A bank can decide whether to provide them loans or not In each period. Following Kim(2003)'s Infinite horizon model on the soft budget constraint, we introduce a situation in which banks compete against each other for higher net long-term payoffs from their loans to innovative SMEs and non-innovative SMEs. From the models, we show that competition among banks in general leads to a tighter decision against innovative SMEs, as a Nash equilibrium. It is not because the government bank is simply loose in providing loans, but because competition among commercial banks for fewer riskier borrowers results in tighter loan decisions against innovative SMEs. Thus, the competitive market for policy loans to innovative SMEs fails to reach the socially optimal level of loans for innovative SMMs. Commercial banks in the competitive market may require additional supports from the government to make up for the differences in their payoffs to support innovative SMEs, possibly much riskier due to moral hazards and poor discounted cash flows. The monopolistic government bank might also request such supports from the government to fund otherwise unqualified SMEs. We calculate an optimal level of governmental support for banks to guarantee funding such high-risk innovative SMEs over periods without deviating from their optimal Nash equilibrium policies.

• The Journal of Fisheries Business Administration
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• v.37 no.3 s.72
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• pp.45-63
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• 2006

A number of public loans with lower interests and other tax benefits have been provided for farmers and fishermen. However, much of those loans have been accumulated as non-performing. The result is that a large part of fisheries debts are now on the verge of default, Those loans, that fail to pay interests, keep rapidly growing like a time bomb. Now something has to be done before it burst. Firstly, the government must clean up the debts caused by government's mismanagement in the past. The past debt must be repaid or written off by the government since its guarantee was committed several times in guidelines regarding public loans. As such a measure, the government can greatly enlarge its capital contribution to the Credit Guarantee Fund for Farmers and Fishermen and Loss Guarantee fund for Policy Loan. It would greatly help to compensate local branches of fisheries cooperatives for their loss incurred from carrying public loans. In the past, the government used to roll over old debts of fishermen with new debts whenever maturity came. It ends up growing the size of non - performing loans. For this reason, it is not delay of the debt payment, but its write - off that fishery society needs a lot. Secondly, the loan authorities must lower overall risk in providing public loans for fishermen in the future. The whole process must be thoroughly reviewed and changed to provide and manage government loans. To facilitate this, fisheries cooperative must stop being just a public agent, rather take a bigger responsibility in selecting, and checking loan beneficiaries, and securing debt repayment. Incentives must be arranged properly enough to induce fisheries cooperatives to treat public loans just like their own business. Finally, the so - called 'special account of policy loan in fisheries industry' must be set up to enhance the transparency and to check the performance of public loans programs.

• East Asian Economic Review
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• v.16 no.4
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• pp.333-361
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• 2012

Development assistance plays an important role in contributing to the development process of Cambodia. The top bilateral donors, China, Japan, and Korea provide ODA to Cambodia in different characteristics and from different perspectives. This study tries to pull out some implications for Cambodia as recipient and for donors in order to achieve the development of Cambodia's economy-effectively by using the ODA. As a viewpoint, ODA structure emphasizes the intention of donors, either for their self-interest and benefit or for achieving MDGs. China's ODA to Cambodia seems to distort the ODA allocation by other donors with unconditional loans or loans with conditionality focusing only on infrastructure. Cambodia benefits from the better infrastructure, but it has to pay the price set by China, even for concessional loans. The driving interests of Japan and Korea are more influenced by their national policy goals and the expected perceptions of their voters. The aid projects should at least catch the attention of national media or win obvious and unbiased support from the suffering people in the recipient countries.

• Journal of Distribution Science
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• v.13 no.10
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• pp.5-13
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• 2015

Purpose - This study aims to suggest appropriate policies and performance indicators for financial aid recipients. It analyzes the existing regular government policy funds support project, especially its propriety and reasonability. Research design, data, and methodology - When financial aid is effective, it should be able to predict small enterprise business results. Additionally, there should be an evaluation, checking before and after performance rates so that the rate of achievement and outcome can be measured. This study's contribution for small enterprises is in researching the best way to improve this support system. Results - The Small Enterprise and Market Service (SEMAS), currently designated as a support organization for implementing the government financial aid project, has assessment indicators. However, these focus mainly on quantitative indicators and survey results. Conclusions - In the future, there is some need to draw up measures, setting the right direction for developing policies for the small enterprise fund loans and improving the management of the plans. Eventually, this effort will dispel concerns about the present support policy, which is considered to be weakening small enterprises.

• East Asian Economic Review
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• v.22 no.2
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• pp.217-239
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• 2018

This paper tests empirically the causal relationship between bank loans and the monetary base before and after the adoption of inflation targeting in seven Asia-Pacific countries using Toda-Yamamoto Granger non causality test and the bootstrap test for causality. The most striking finding is that the bank loans Granger cause the monetary base during the inflation targeting period in all the countries, except Japan, which was under the influence of the quantitative easing, whereas the causality appeared diverse before the inflation targeting regime. This result implies the need for the policy makers to take the endogenous nature of the money supply into account in the modern economy.

• Korean Journal of Agricultural Science
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• v.49 no.4
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• pp.813-821
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• 2022

The Livestock Raw Material Purchase Fund is a policy to increase the export of livestock products by providing loans to exporters of livestock products (including byproducts). The policy started in 2015 and the annual budget is about 26 billion won. However, a quantitative evaluation of policy effects has not yet been made. Therefore, in this study, the economic surplus of the policy was analyzed using the equilibrium displacement model (EDM). From the results of the welfare analysis, from 2016 to 2019, producer surplus in the chicken and duck market increased by KRW 70.9 billion, while consumer surplus decreased by KRW 70 billion. In other words, the total economic surplus of the chicken and duck market increased by about one billion won during the same period due to the increase in export demand according to the policy. Therefore, the Livestock Raw Material Purchase Fund can be viewed as a policy to maintain and increase export demand for export livestock products and to improve the economic surplus of the livestock product market. Also, since the policy is based on loans, it does not place a burden on the government's finances. Therefore, this policy should continue in the future.

• Asia-Pacific Journal of Business
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• v.11 no.4
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• pp.189-203
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• 2020

Purpose - This study aims in analyzing the dynamic relationship between household loans and housing prices according to the characteristics of depository institutions after the financial crisis, identifying the recent trends between them, and making policy suggestions for stabilizing house prices. Design/methodology/approach - The monthly data used in this study are household loans, household loan interest rates, and housing prices ranging from January 2012 to May 2020, and came from ECOS of the Bank of Korea and Liiv-on of Kookmin Bank. This study used vector auto-regression, generalized impulse response function, and forecast error variance decomposition with the data so as to yield analysis results. Findings - The analysis of this study no more shows that the household loan interest rates in both deposit banks and non-bank deposit institutions had statistically significant effects on housing prices. Also, unlike the previous studies, there was statistically significant bi-directional causality between housing prices and household loans in neither deposit banks nor non-bank deposit institutions. Rather, it was found that there is a unidirectional causality from housing prices to household loans in deposit banks, which is considered that housing prices have one-sided effects on household loans due to the overheated housing market after the financial crisis. Research implications or Originality - As a result, Korea's housing market is closely related to deposit banks, and housing prices are acting as more dominant information variables than interest rates or loans under the long-term low interest rate trend. Therefore, in order to stabilize housing prices, the housing supply must be continuously made so that everyone can enjoy housing services equally. In addition, the expansion and reinforcement of the social security net should be realized systematically so as to stop households from being troubled with the housing price decline.