• Title/Summary/Keyword: Service sector

Search Result 1,070, Processing Time 0.03 seconds

Impacts of R&D and Smallness of Scale on the Total Factor Productivity by Industry (R&D와 규모의 영세성이 산업별 총요소생산성에 미치는 영향)

  • Kim, Jung-Hwan;Lee, Dong-Ki;Lee, Bu-Hyung;Joo, Won
    • Asia-Pacific Journal of Business Venturing and Entrepreneurship
    • /
    • v.2 no.4
    • /
    • pp.71-102
    • /
    • 2007
  • There were many comprehensive analyses conducted within the existing research activities wherein factors affecting technology progress including investment in R&D vis-${\Box}$-vis their influences act as the determinants of TFP. Note, however, that there were few comprehensive analysis in the industrial research performed regarding the impact of the economy of scale as it affects TFP; most of these research studies dealt with the analysis of the non -parametric Malmquist productivity index or used the stochastic frontier production function models. No comprehensive analysis on the impacts of individual independent variables affecting TFP was performed. Therefore, this study obtained the TFP increase rate of each industry by analyzing the factors of the existing growth accounting equation and comprehensively analyzed the TFP determinants by constructing a comprehensive analysis model considering the investment in R&D and economy of scale (smallness by industry) as the influencers of TFP by industry. First, for the TFP increase rate of the 15 industries as a whole, the annual average increase rate for 1993${\sim}$ 1997 was approximately 3.8% only; during 1999${\sim}$ 2000 following the foreign exchange crisis, however, the annual increase rate rose to approximately 7.8%. By industry, the annual average increase rate of TFP between 1993 and 2000 stood at 11.6%, the highest in the electrical and electronic equipment manufacturing business and IT manufacturing sector. In contrast, a -0.4% increase rate was recorded in the furniture and other product manufacturing sectors. In the case of the service industry, the TFP increase rate was 7.3% in the transportation, warehousing, and communication sectors. This is much higher than the 2.9% posted in the electricity, water, and gas sectors and -3.7% recorded in the wholesale, food, and hotel businesses. The results of the comprehensive analysis conducted on the determinants of TFP showed that the correlations between R&D and TFP in general were positive (+) correlations whose significance has yet to be validated; in the model where the self-employed and unpaid family workers were used as proxy variables indicating the smallness of industry out of the total number of workers, however, significant negative (-) correlations were noted. On the other hand, the estimation factors of variables surrogating the smallness of scale in each industry showed that a consistently high "smallness of scale" in an industry means a decrease in the increase rate of TFP in the same industry.

  • PDF

Analysis of Energy Savings and CO2 Emission Reductions via Application of Smart Grid System (지능형 전력망(스마트 그리드) 적용을 통한 에너지 절감 및 CO2 감축 효과 분석)

  • Park, Soo-Hwan;Han, Sang-Jun;Wee, Jung-Ho
    • Journal of Korean Society of Environmental Engineers
    • /
    • v.39 no.6
    • /
    • pp.356-370
    • /
    • 2017
  • The energy savings and $CO_2$ emission reductions obtainable from the situation that the Smart Grid system (SGs) is assumed to be applied in Korea up to 2030 is quantitatively analyzed with many reported data. For calculation, SGs is divided into five sectors such as Smart Transmission and Distribution (ST&D), Smart Consumer (SC), Smart Electricity Service (SES), Smart Renewable Energy (SRE) and Smart Transportation (ST). Total annual energy savings in 2030 is estimated to be approximately 103,121 GWh and this is 13.1% of total electricity consumption outlook. Based on this value, total amount of reducible $CO_2$ emissions is calculated to 55.38 million $tCO_2$, which is 17.6% of total nation's GHG reduction target. Although the contribution of energy saving due to SGs to total electricity consumption increases as years go by, that of $CO_2$ emission reduction gradually decreases. This might be because that coal fired based power generation is planned to be sharply increased and the rate of $CO_2$ emission reduction scheduled by nation is very fast. The contributable portion of five each sector to total $CO_2$ emission reductions in 2030 is estimated to be 44.37% for SC, 29.16% for SRE, 20.12% for SES, 5.11% for ST&D, and 1.24% for ST.

A Characteristics and Improvement of Thermal Environment in Summer of Protected Horticulture Complex Using CFD Simulation (CFD 시뮬레이션을 이용한 시설원예단지 여름철 외부 열환경 특성 및 개선방안)

  • Son, Jin-Kwan;Kong, Min-Jae;Choi, Deuggyu;Kang, Dong-Hyeon;Park, Min-Jung;Yun, Sung-Wook;Lee, Seungchul;Lee, Si-Young
    • Journal of Korean Society of Rural Planning
    • /
    • v.24 no.3
    • /
    • pp.73-86
    • /
    • 2018
  • Agricultural or rural landscape provides various ecosystem services. However, the ecosystem services function is declining due to various environmental problems such as climate change, land use change, stream intensification, non-point pollution and garbage. The A1B scenario predicts that the mean air temperature of South Korea will rise $3.8^{\circ}C$ degrees celsius in 2100. Agricultural sector is very vulnerable to climate change, so it must be thoroughly predicted and managed. In Korea, the facility horticulture complex is 54,051ha in 2016 and is the 3rd largest in the world(MAFRA, 2014). Facilities of horticultural complexes are reported to cause problems such as groundwater decrease, vegetation and insects diversity reduction, landscapes damage and garbage increase, compared with the existing land use paddy fields. Heat island phenomenon associated with climate change is also accelerated by the high heat absorption of horticultural sites. Therefore, we analyzed the heat island phenomenon occurring in the facility of horticultural complex in Korea. As an improvement measurement, I examined how much air temperature is reduced by putting the channel and the open space. In the case of the Buyeo area, the Computational Fluid Dynamics (CFD) simulation was analyzed for the average summer temperature distribution in the current land use mode at $38.9^{\circ}C$. As an improvement measurement, CFD simulation after 10% of 6m water channel was found to have an effect of lowering the summer temperature of about $2.7^{\circ}C$ compared with the present average of $36.2^{\circ}C$. In addition, CFD simulations after analyzing 10% of the open space were analyzed at $34.7^{\circ}C$, which is $4.2^{\circ}C$ lower than the present. For the Jinju area, CFD simulations were analyzed for the average temperature of summer at $37.8^{\circ}C$ in the present land use pattern. As an improvement measure, CFD simulations after 10% of 6m water channel were found to have an effect of lowering the summer temperature of about $2.6^{\circ}C$ compared to the current average of $35.2^{\circ}C$. In addition, CFD simulations after analyzing 10% of the open space were analyzed at $33.9^{\circ}C$, which is $3.9^{\circ}C$ lower than the present. It can be said that the effect of summer temperature drop in open space and waterway has been proven. The results of this study are expected to be reflected in sustainable agriculture land use and used as basic data for government - level policy in land use planning for climate change.

Married Women's Economic Dependency and the Welfare State (기혼여성의 경제적 의존과 복지국가)

  • Kim, Young-mi
    • Korean Journal of Social Welfare Studies
    • /
    • no.36
    • /
    • pp.55-80
    • /
    • 2008
  • Research on the welfare state or income inequality has been concerned with variations in inequality between societies or families. These studies tend to view the family as a unit of shared interests where incomes are pooled and distributed equally. This study makes a theoretical and empirical case for why it is important to look at economic dependency within the family in comparative welfare state research. Using the Luxembourg Income Study data this study examined married women's dependency on their husbands' earnings in 16 western industrialized countries. The constructed measure for married women's level of economic dependency followed the procedure of Sørensen & McLanahan(1987), which stated : "her dependency is measured by the extent to which a woman's standard of living(as determined by her share of income) is derived from a transfer from her husband." The finding suggested that married women's economic dependence was lowest in Scandinavian countries. On the contrary, in Southern Europe countries most married women were dependent on husbands' earnings. In Netherlands, Austria, Germany where the share of part-time work among married women was high, married women's economic dependence was also high. This showed the women's labor force participation did not mean that the majority of couples were equal with respect to earnings, nor that a major shift in the sexual division of labour has taken place. This paper analysed the causal relationship between the married women's economic independence and the welfare state by using Ragin(2000)'s Fuzzy-Set Qualitative Comparative Analysis. This analysis considered the various conditions of the welfare state : namely, left power, union mobilization density, women's mobilization, public service sector employment and generous support on the family. The result showed that powerful union, high level of women's mobilization and the generous support on the family were necessary conditions for 'relatively high' level of married women's economic independence.

Study of major issues and trends facing ports, using big data news: From 1991 to 2020 (뉴스 빅데이터를 활용한 항만이슈 변화연구 : 1991~2020)

  • Yoon, Hee-Young
    • Journal of Korea Port Economic Association
    • /
    • v.37 no.1
    • /
    • pp.159-178
    • /
    • 2021
  • This study analyzed issues and trends related to ports with 86,611 news articles for the 30 years from 1991 to 2020, using BIGKinds, a big data news analysis service. The analysis was based on keyword analysis, word cloud, relationship diagram analysis offered by BIG Kinds. Analysis results of issues and trends on ports for the last 30 years are summarized as follows. First, during Phase 1 (1991-2000), individual ports such as Busan, Incheon, and Gwangyang ports tried to strengthen their own competitiveness. During Phase 2 (2001-2010), efforts were made on gaining more professional and specialized port management abilities by establishing the Busan Port Authority in 2004, the Incheon Port Authority in 2005, and the Ulsan Port Authority in 2007. During Phase 3 (2011-2020), the promotion of future-oriented, eco-friendly, and smart ports was major issues. Efforts to reduce particulate matters and pollutants produced from ports were accelerated, and an attempt to build a smart port driven by port automation and digitalization was also intensified. Lastly, in 2020, when the maritime sector was severely hit by the unexpected shock of the COVID-19 pandemic, a microscopic analysis of trends and issues in 2019 and 2020 was made to look into the impact the pandemic on the maritime industry. It was found that shipping and port industries experienced more drastic changes than ever while trying to prepare for a post-pandemic era as well as promoting future-oriented ports. This study made policy suggestions by analyzing port-related news articles and trends, and it is expected that based on the findings of this research, further studies on enhancing the competitiveness of ports and devising a sustainable development strategy will follow through a comparative analysis of port issues of different countries, thereby making further progress toward academic research on ports.

Operative Challenges in Releasing Administrative Information and Records (행정정보 및 보존기록물 공개의 운영과제)

  • Lee, Won-Kyu
    • The Korean Journal of Archival Studies
    • /
    • no.12
    • /
    • pp.81-135
    • /
    • 2005
  • The release of administrative information has been the challenge of our age following the maturation of democratic ideology in our society. However, differences of opinion and conflict still exist between the government and private sectors regarding the issue, and it seems that the technical and policy-related insufficiencies of information and record management that actually operate the release of information are the main causes. From the perspective of records management, records or information are variable in their nature, value, and influence during their life span. The most controversial issue is the records and information in the current stage of carrying out business activities. This is because the records and information pertaining to finished business are but evidence to ascertain the past, and have only a limited relationship to the ideal of the 'democratic participation' by citizens in activities of the public sector. The current information release policies are helpless against the 'absence of information,' or incomplete records, but such weakness can be supplemented by enforcing record management policies that make obligatory the recording of all details of business activities. In addition, it is understood that the installation of 'document offices("Jaryogwan")' that can manage each organization's information and records will be an important starting point to integrate the release, management, and preservation of information and records. Nevertheless, it seems that the concept of 'release' in information release policies refers not to free use by all citizens but is limited to the 'provision' of records according to public requests, and the concept of 'confidential' refers not to treating documents with total secrecy but varies according to the particulars of each situation, making the actual practice of information release difficult. To solve such problems, it is absolutely necessary to collect the opinions of various constituents associated with the recorded information in question, and to effectively mediate the collective opinions and the information release requests coming from applicants, to carry out the business more practically. Especially crucial is the management of the process by which the nature and influence of recorded information changes, so that information which has to be confidential at first may become available for inquiry and use over time through appropriate procedures. Such processes are also part of the duties that record management, which is in charge of the entire life span of documents, must perform. All created records will be captured within a record management system, and the record creation data thus collected will be used as a guide for inquiry and usage. With 'document offices(Jaryogwan)' and 'archives' controlling the entire life span of records, the release of information will become simpler and more widespread. It is undesirable to try to control only through information release policies those records the nature of which has changed because, unlike the ones still in the early stages of their life span and can directly influence business activities, their work has finished, and they have become historical records or evidences pointing to the truth of past events. Even in the past, when there existed no formal policy regarding the release of administrative information, the access and use of archival records were permitted. A more active and expanded approach must be taken regarding the 'usage' of archival records. If the key factor regarding 'release' lies in the provision of information, the key factor regarding 'usage' lies in the quality and level of the service provided. The full-scale usage of archival records must be preceded by the release of such records, and accordingly, a thorough analysis of the nature, content, and value of the records and their changes must be implemented to guarantee the release of information before their use is requested. That must become a central task of document offices and "Today's information" will soon become "yesterday's records," and the "reality" of today will become "history" of the past. The policies of information release and record management share information records as their common objective. As they have a mutual relationship that is supplementary and leads toward perfection, the two policies must both be differentiated and integrated with each another. It is hoped that the policies and business activities of record management will soon become normalized and reformed for effective and fair release of information.

A Study on the Improvement of Airspace Legislation in Korea (우리나라 공역 법제의 개선방안)

  • Kim, Jong-Dae
    • The Korean Journal of Air & Space Law and Policy
    • /
    • v.33 no.2
    • /
    • pp.61-114
    • /
    • 2018
  • Recently airspace became a hot issue considering today's international relations. However, there was no data that could be fully explained about a legal system of korean airspace, so I looked at law and practice about korean airspace together. The nation's aviation law sector is comletely separate from those related to civil and military aircraft, at least in legal terms. The Minister of Land, Infrastructure and Transport shall carry out his/her duties with various authority granted by the "Aviation Safety Act". The nation's aviation-related content is being regulated too much by the Ministry of Land, Infrastructure and Transport's notice or regulation, and there are many things that are not well known about which clauses of the upper law are associated with. The notice should be clearly described only in detail on delegated matters. As for the airspace system, the airspace system is too complex for the public to understand, and there seems to be a gap between law and practice. Therefore, I think it would be good to reestablish a simple and practical airspace system. Airspace and aviation related tasks in the military need to be clearly understood by distinguishing between those entrusted by the Minister of Land, Infrastructure and Transport and those inherent in the military. Regarding matters entrusted by the Minister of Land, Infrastructure and Transpor, it is necessary to work closely with the Minister of Land, Infrastructure and Transport when preparing related work guidelines, and to clarify who should prepare the guidelines. Regarding airspace control as a military operation, policies or guidelines that are faithful to military doctrine on airspace control are needed.

Tourism Industry and the Multidimensionality of Emotional Labor in Mexico (멕시코의 관광산업과 감정노동의 다차원성)

  • Joo, Jong-Taick
    • Iberoamérica
    • /
    • v.22 no.1
    • /
    • pp.73-109
    • /
    • 2020
  • In the tourism industry, emotional labor-related problems are highly likely because workers cannot avoid frequent face-to-face contacts with customers. Emotional labor, however, is not always recognized in the same pattern by every worker in similar situations. As can be see in this research, emotional labor appears to vary depending on individual characteristics and sociocultural and economic conditions. In fact, there are so many factors affecting emotional labor, and the level of influence concerning these factors can vary depending on when and where they are. Psychological and mental pains and stress from emotional labor depend on a number of factors. The expression of emotional labor, depending on age, length of employment and gender, shows a clear difference. In particular, for those who are planning to participate in international labor migration to the United States in the future, emotional labor was often not recognized as a serious problem or rather a positive social and cultural experience. In fact, there are various types of tourism workers in Oaxaca, and their experiences vary greatly depending on individual and economic and sociocultural environments. The emotional labor of the workers in the tourism sector of Oaxaca also has various forms depending on various conditions. Positive or negative perceptions and consequences of emotional labor vary depending on the circumstances of the individual and working conditions. In other words, socioeconomic conditions, individual personality or experiences, sociocultural characteristics, and autonomy in the workplace, have a significant impact. As a result, the forms and effects of emotional labor expressed and understood by tourism workers vary considerably and may vary depending on the situations. Considering these problems, the way emotional labor emerges is greatly influenced by sociocultural or personal factors as well as economic factors. In addition, rather than considering the existence and seriousness of emotional labor as given depending on the nature of a particular industry or work, it should also be recognized that the expression of emotional labor differ considerably from individual to individual. Also, the seriousness of problems caused by emotional labor can be diversified. In this sense, it is necessary to clearly understand the meanings of the dynamism, diversity and multidimensionality of emotional labor from a new perspective.

Problems in the Korean National Family Planning Program (한국가족계획사업(韓國家族計劃事業)의 문제점(問題點))

  • Hong, Jong-Kwan
    • Clinical and Experimental Reproductive Medicine
    • /
    • v.2 no.2
    • /
    • pp.27-36
    • /
    • 1975
  • The success of the family planning program in Korea is reflected in the decrease in the growth rate from 3.0% in 1962 to 2.0% in 1971, and in the decrease in the fertility rate from 43/1,000 in 1960 to 29/1,000 in 1970. However, it would be erroneous to attribute these reductions entirely to the family planning program. Other socio-economic factors, such as the increasing age at marriage and the increasing use of induced abortions, definitely had an impact on the lowered growth and fertility rate. Despite the relative success of the program to data in meeting its goals, there is no room for complacency. Meeting the goal of a further reduction in the population growth rate to 1.3% by 1981 is a much more difficult task than any one faced in the past. Not only must fertility be lowered further, but the size of the target population itself will expand tremendously in the late seventies; due to the post-war baby boom of the 1950's reaching reproductive ages. Furthermore, it is doubtful that the age at marriage will continue to rise as in the past or that the incidence of induced abortion will continue to increase. Consequently, future reductions in fertility will be more dependent on the performance of the national family planning program, with less assistance from these non-program factors. This paper will describe various approaches to help to the solution of these current problems. 1. PRACTICE RATE IN FAMILY PLANNING In 1973, the attitude (approval) and knowledge rates were quite high; 94% and 98% respectively. But a large gap exists between that and the actual practice rate, which is only 3695. Two factors must be considered in attempting to close the KAP-gap. The first is to change social norms, which still favor a larger family, increasing the practice rate cannot be done very quickly. The second point to consider is that the family planning program has not yet reached all the eligible women. A 1973 study determineded that a large portion, 3096 in fact, of all eligible women do not want more children, but are not practicing family planning. Thus, future efforts to help close the KAP-gap must focus attention and services on this important large group of potential acceptors. 2. CONTINUATION RATES Dissatisfaction with the loop and pill has resulted in high discontinuation rates. For example, a 1973 survey revealed that within the first six months initial loop acceptance. nearly 50% were dropouts, and that within the first four months of inital pill acceptance. nearly 50% were dropouts. These discontinuation rates have risen over the past few years. The high rate of discontinuance obviously decreases the contraceptive effectiveness. and has resulted in many unwanted births which is directly related to the increase of induced abortions. In the future, the family planning program must emphasize the improved quality of initial and follow-up services. rather than more quantity, in order to insure higher continuation rates and thus more effective contraceptive protection. 3. INDUCED ABORTION As noted earlier. the use of induced abortions has been increase yearly. For example, in 1960, the average number of abortions was 0.6 abortions per women in the 15-44 age range. By 1970. that had increased to 2 abortions per women. In 1966. 13% of all women between 15-44 had experienced at least one abortion. By 1971, that figure jumped to 28%. In 1973 alone, the total number of abortions was 400,000. Besides the ever incre.sing number of induced abortions, another change has that those who use abortions have shifted since 1965 to include- not. only the middle class, but also rural and low-income women. In the future. in response to the demand for abortion services among rural and low-income w~men, the government must provide and support abortion services for these women as a part of the national family planning program. 4. TARGET SYSTIi:M Since 1962, the nationwide target system has been used to set a target for each method, and the target number of acceptors is then apportioned out to various sub-areas according to the number of eligible couples in each area. Because these targets are set without consideration for demographic factors, particular tastes, prejudices, and previous patterns of acceptance in the area, a high discontinuation rate for all methods and a high wastage rate for the oral pill and condom results. In the future. to alleviate these problems of the methodbased target system. an alternative. such as the weighted-credit system, should be adopted on a nation wide basis. In this system. each contraceptive method is. assigned a specific number of points based upon the couple-years of protection (CYP) provided by the method. and no specific targets for each method are given. 5. INCREASE OF STERILIZA.TION TARGET Two special projects. the hospital-based family planning program and the armed forces program, has greatly contributed to the increasing acceptance in female and male sterilization respectively. From January-September 1974, 28,773 sterilizations were performed. During the same time in 1975, 46,894 were performed; a 63% increase. If this trend continues, by the end of 1975. approximately 70,000 sterilizations will have been performed. Sterilization is a much better method than both the loop and pill, in terms of more effective contraceptive protection and the almost zero dropout rate. In the future, the. family planning program should continue to stress the special programs which make more sterilizations possible. In particular, it should seek to add the laparoscope techniques to facilitate female sterilization acceptance rates. 6. INCREASE NUMBER OF PRIVATE ACCEPTORS Among the current family planning users, approximately 1/3 are in the private sector and thus do not- require government subsidy. The number of private acceptors increases with increasing urbanization and economic growth. To speed this process, the government initiated the special hospital based family planning program which is utilized mostly by the private sector. However, in the future, to further hasten the increase of private acceptors, the government should encourage doctors in private practice to provide family planning services, and provide the contraceptive supplies. This way, those do utilize the private medical system will also be able to receive family planning services and pay for it. Another means of increasing the number of private acceptors, IS to greatly expand the commercial outlets for pills and condoms beyond the existing service points of drugstores, hospitals, and health centers. 7. IE&C PROGRAM The current preferred family size is nearly twice as high as needed to achieve a stable poplation. Also, a strong boy preference hinders a small family size as nearly all couples fuel they must have at least one or more sons. The IE&C program must, in the future, strive to emphasize the values of the small family and equality of the sexes. A second problem for the IE&C program to work. with in the: future is the large group of people who approves family planning, want no more children, but do not practice. The IE&C program must work to motivate these people to accept family planning And finally, for those who already practice, an IE&C program in the future must stress continuation of use. The IE&C campaign, to insure highest effectiveness, should be based on a detailed factor analysis of contraceptive discontinuance. In conclusion, Korea faces a serious unfavorable sociodemographic situation- in the future unless the population growth rate can be curtailed. And in the future, the decrease in fertility will depend solely on the family planning program, as the effect of other socio-economic factors has already been maximumally felt. A second serious factor to consider is the increasing number of eligible women due to the 1950's baby boom. Thus, to meet these challenges, the program target must be increased and the program must improve the effectiveness of its current activities and develop new programs.

  • PDF

Scale and Scope Economies and Prospect for the Korea's Banking Industry (우리나라 은행산업(銀行産業)의 효율성분석(效率性分析)과 제도개선방안(制度改善方案))

  • Jwa, Sung-hee
    • KDI Journal of Economic Policy
    • /
    • v.14 no.2
    • /
    • pp.109-153
    • /
    • 1992
  • This paper estimates a translog cost function for the Korea's banking industry and derives various implications on the prospect for the Korean banking structure in the future based on the estimated efficiency indicators for the banking sector. The Korean banking industry is permitted to operate trust business to the full extent and the security business to a limited extent, while it is formally subjected to the strict, specialized banking system. Security underwriting and investment businesses are allowed in a very limited extent only for stocks and bonds of maturity longer than three year and only up to 100 percent of the bank paid-in capital. Until the end of 1991, the ceiling was only up to 25 percent of the total balance of the demand deposits. However, they are prohibited from the security brokerage business. While the in-house integration of security businesses with the traditional business of deposit and commercial lending is restrictively regulated as such, Korean banks can enter the security business by establishing subsidiaries in the industry. This paper, therefore, estimates the efficiency indicators as well as the cost functions, identifying the in-house integrated trust business and security investment business as important banking activities, for various cases where both the production and the intermediation function approaches in modelling the financial intermediaries are separately applied, and the banking businesses of deposit, lending and security investment as one group and the trust businesses as another group are separately and integrally analyzed. The estimation results of the efficiency indicators for various cases are summarized in Table 1 and Table 2. First, security businesses exhibit economies of scale but also economies of scope with traditional banking activities, which implies that in-house integration of the banking and security businesses may not be a nonoptimal banking structure. Therefore, this result further implies that the transformation of Korea's banking system from the current, specialized system to the universal banking system will not impede the improvement of the banking industry's efficiency. Second, the lending businesses turn out to be subjected to diseconomies of scale, while exhibiting unclear evidence for economies of scope. In sum, it implies potential efficiency gain of the continued in-house integration of the lending activity. Third, the continued integration of the trust businesses seems to contribute to improving the efficiency of the banking businesses, since the trust businesses exhibit economies of scope. Fourth, deposit services and fee-based activities, such as foreign exchange and credit card businesses, exhibit economies of scale but constant returns to scope, which implies, the possibility of separating those businesses from other banking and trust activities. The recent trend of the credit card business being operated separately from other banking activities by an independent identity in Korea as well as in the global banking market seems to be consistent with this finding. Then, how can the possibility of separating deposit services from the remaining activities be interpreted? If one insists a strict definition of commercial banking that is confined to deposit and commercial lending activities, separating the deposit service will suggest a resolution or a disappearance of banking, itself. Recently, however, there has been a suggestion that separating banks' deposit and lending activities by allowing a depository institution which specialize in deposit taking and investing deposit fund only in the safest securities such as government securities to administer the deposit activity will alleviate the risk of a bank run. This method, in turn, will help improve the safety of the payment system (Robert E. Litan, What should Banks Do? Washington, D.C., The Brookings Institution, 1987). In this context, the possibility of separating the deposit activity will imply that a new type of depository institution will arise naturally without contradicting the efficiency of the banking businesses, as the size of the banking market grows in the future. Moreover, it is also interesting to see additional evidences confirming this statement that deposit taking and security business are cost complementarity but deposit taking and lending businesses are cost substitute (see Table 2 for cost complementarity relationship in Korea's banking industry). Finally, it has been observed that the Korea's banking industry is lacking in the characteristics of natural monopoly. Therefore, it may not be optimal to encourage the merger and acquisition in the banking industry only for the purpose of improving the efficiency.

  • PDF