• The Korean Journal of Financial Management
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• v.10 no.1
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• pp.249-280
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• 1993

Recent financial theory views insurance policies as financial instruments that are traded in markets and whose prices reflect the forces of supply and demand. This article analyzes individual's insurance purchasing behavior along with capital market investment activities, which will provide a more realistic look at the tradeoff between insurance and investment in the individual's budget constraint. It is shown that the financial economic concept of insurance cost should reflect the opportunity cost of insurance premium. The author demonstrates the importance of riskless and risky financial assets in reaching an equilibrium insurance premium. In addition, the paper also investigates how the investment income could affect the four established theorems on traditional insurance literature. At the present time in Korea, the price deregulation is being debated as the most important current issue in insurance industry. In view of the results of this paper, insurance companies should recognize investment income in pricing their coverage if insurance prices are deregulated. Otherwise. price competition may force insurance companies to restrict coverage or to leave the market.

• KDI Journal of Economic Policy
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• v.14 no.1
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• pp.191-212
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• 1992

This paper discusses the role of money in the process of capital accumulation where financial markets are impeded by contract enforcement problems in the context of overlapping generations framework. In particular, in less developed countries (LDCs) creditors may know little about the repayment capability of potential debtors due to incomplete information so that financial instruments other than money may not acceptable to them. In this paper the impediments to the operation of the private finanical markets are explicitly modelled. We argue that creditors cannot observe actual investment decisions made by the potential borrowers, and as a result, loan contracts may not be fully enforceable. Therefore, a laissez-faire regime may fail to provide the economy with the appropriate financial instruments. Under these circumstances, we introduce a government operated discount window (DW) that acts as an open market buyer of private debt. This theoretical structure represents the practice of governments of many LDCs to provide loans (typically at subsidized interest rates) to preferred borrowers either directly or indirectly through the commercial banking system. It is shown that the DW can substantially overcome impediments to trade which are caused by the credit market failure. An appropriate supply of the DW loan enables producers to purchase the resources they cannot obtain through direct transactions in the credit market. This result obtains even if the DW is subject to the same enforcement constraint that is responsible for the market failure. Thus, the DW intervention implies higher investment and output. However, the operation of the DW may cause inflation. Furthermore, the provision of cheap loans through the DW results in a worse income distribution. Therefore, there is room for welfare enhancing schemes that utilize the higher output to develop. We demonstrate that adequate lump sum taxes-cum-transfers along with the operation of the DW can support an allocation that is Pareto superior to the laissez-faire equilibrium allocation.

• Journal of Labour Economics
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• v.26 no.3
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• pp.149-179
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• 2003

This study is analysing the factors determining individuals' behavior of selecting self-employment not only at the micro-level but also at the macro-level to put a particular emphasis on the financial constraint and unemployment rate representing business cycle. The data used in this study are "Korean Labor and Income Panal Study" of the Korea Labor Institute and "Economically Active Population Survey" of National Statistical Office. The main findings are as follows. First, human capital such as educational attainment and job experience has positive effects on male's selection of self-employment. The effects of job experience, however, changed negative for female's selection of self-employment. Second, real estate is significantly enhancing the selection probabilities of employer selection while the income from financial assets has negative effects. Third, entrepreneurial culture and environment are also raising the self-employment selection probability. Lastly, the regional unemployment rate representing the business cycle has positive effects on the self-employment selection after the financial crisis in 1997 both at the micro and macro level. Moreover, the coefficient of regional unemployment rate has changed positive in the structural model of self-employment selection controlling for selection bias and income opportunities, which means that individual's behavior of self-employment selection is rather complex when accounting for the uncertainties of income opportunities and diverse characteristics of self-employment workforce.

• The Korean Journal of Financial Management
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• v.22 no.1
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• pp.1-36
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• 2005

In this study, we analyzed determinant factors of leverage ratio and debt maturity for Korean firms in the simultaneous equation system using 2SLS (two stage least square) method under assumption that two variables are jointly determined in the capital structure decision. As a result of the analysis, we found that leverage ratio and debt maturity are positively related. Also, as for determinant factors of debt maturity, agency cost hypothesis, asset maturity matching hypothesis, signalling and liquidity risk hypothesis are all generally supported, and further leverage ratio are significantly positively related with firm size, but negatively related with default risk. However, when we divided samples into groups according to bank debt level and Chaebul affiliation, with contrast to existing study which worked on similar issues with OLS, we found no evidence supporting the argument that the information asymmetry problem is less severe in firms with more bank debt, whereas information asymmetry and financial constraint problems are more severe in non-Chaebul affiliated firms.

• 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 Distribution Science
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• v.13 no.5
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• pp.71-82
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• 2015

Purpose - The purpose of this study is to investigate risk price implied from the pricing kernel of Korean stock distribution market. Recently, it is considered that the quantitative easing programs of major developed countries are contributing to a reduction in global uncertainty caused by the 2007~2009 financial crisis. If true, the risk premium as compensation for global systemic risk or economic uncertainty should show a decrease. We examine whether the risk price in the Korean stock distribution market has declined in recent years, and attempt to provide practical implications for investors to manage their portfolios more efficiently, as well as academic implications. Research design, data and methodology - To estimate the risk price, we adopt a non-parametric method; the minimum norm pricing kernel method under the LOP (Law of One Price) constraint. For the estimation, we use 17 industry sorted portfolios provided by the KRX (Korea Exchange). Additionally, the monthly returns of the 17 industry sorted portfolios, from July 2000 to June 2014, are utilized as data samples. We set 120 months (10 years) as the estimation window, and estimate the risk prices from July 2010 to June 2014 by month. Moreover, we analyze correlation between any of the two industry portfolios within the 17 industry portfolios to suggest further economic implications of the risk price we estimate. Results - According to our results, the risk price in the Korean stock distribution market shows a decline over the period of July 2010 to June 2014 with statistical significance. During the period of the declining risk price, the average correlation level between any of the two industry portfolios also shows a decrease, whereas the standard deviation of the average correlation shows an increase. The results imply that the amount of systematic risk in the Korea stock distribution market has decreased, whereas the amount of industry-specific risk has increased. It is one of the well known empirical results that correlation and uncertainty are positively correlated, therefore, the declining correlation may be the result of decreased global economic uncertainty. Meanwhile, less asset correlation enables investors to build portfolios with less systematic risk, therefore the investors require lower risk premiums for the efficient portfolio, resulting in the declining risk price. Conclusions - Our results may provide evidence of reduction in global systemic risk or economic uncertainty in the Korean stock distribution market. However, to defend the argument, further analysis should be done. For instance, the change of global uncertainty could be measured with funding costs in the global money market; subsequently, the relation between global uncertainty and the price of risk might be directly observable. In addition, as time goes by, observations of the risk price could be extended, enabling us to confirm the relation between the global uncertainty and the effect of quantitative easing. These topics are beyond our scope here, therefore we reserve them for future research.

• Journal of Korean Society of Environmental Engineers
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• v.38 no.5
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• pp.219-227
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• 2016

As the largest source of food waste is housing, and the food waste properties are good enough to recycle, the proactive approach to conventional food waste disposal is highly regarded. This research is to examine food waste management in the Seoul Metropolitan Area (SMA) and non-SMA and to analyze the public inclination to disseminate zero-food waste system (ZFWS) with fermentation and extinction technology in multifamily housing estates. The self-administered questionnaire survey was conducted and the collected data were statistically analyzed. The main findings are summarized as follows: food waste in multifamily housing estates were retrieved by refuse truck and largely recycled for compost and forage. Also, many local governments were in favor of ZFWS, and unwilling to invest in it due to financial constraint. It's found that logistics of ZFWS is likely to be influenced by important features such as a considerable amount of cost saving, effective energy recovery, and efficient operation/management.

• Journal of the Korean housing association
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• v.28 no.3
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• pp.55-64
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• 2017

Elderly population has increased rapidly and adjusting the environment is in demand to support their health. To improve the living environment of elderly, an appropriate plan for customized home modification is needed upon the personal contexts. The purpose of this study is to explain the sequence and to build an insight on customized home modification for vulnerable single elderly. It is a case study based on single target that includes 6 months of execution period deeply seeking the appropriate plan for implementation. The target is a male elderly aged 74 living in a single story detached house. The various research methods are applied in this study including exploratory, participatory, action and trade-off preference researches. The result shows that plan for home modification is complex outcome of interlocking uniqueness between residence environment and resident situation. If customized modification is targeted for residentially vulnerable social group, more sensitive approach aiming for the highest result is required due to financial constraint. To conclude, comprehensive understanding of overall circumstances of a dwelling, a resident and various stakeholder is essential throughout the process. Since the aging-in-place of elderly cannot be achieved without self-sustaining living environment, customized home modification should be a tool to meet housing suitability. It is important to strengthen the experts and future workforce with networks of local residents to share opinions and appropriate plans.

• Asian-Australasian Journal of Animal Sciences
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• v.13 no.3
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• pp.401-412
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• 2000

Like other livestock, monogastric animals are essential components of the farming systems in the tropical countries. Pigs, chicken and ducks are by far the most important animals in the culture of the peoples of developing countries in the tropics. Traditionally these animals are raised in small farms and they are also the bulk producers of meat, eggs etc. in the tropics. In many countries the farmers of these small farms are unable to meet the requirement set by financial institution and other loan giving agencies for agricultural loan. Thus, the small farmers can get neither the opportunity to generate sufficient income to support the family nor to extend the livestock activities. The production systems are characterized by small number of animals with no or minimal inputs, low outputs and periodic destruction of animals by disease. Typically the litter size or flocks are small in number with each household containing 5-6 pigs and 7-10 poultry. Animals are owned by individual households and mostly maintained under a scavenging systems with little or no inputs for housing, feeding or health care. Because of the nature of this production system, productivity of these animals is rather low. The low level of inputs is due to a lack of capital and a low risk oriented outlook. The feed resource base for monogastric is scavenging and consists of household waste, roots and tuber, grain by-products and anything edible found in the immediate environment. Usually farmers select breeding gilts from their own female piglets or to a lesser extent, buy them from neighbors for natural mating. As regards poultry attempts have been made to increase egg and meat production by improving local poultry birds by upgrading and crossbreeding with exotic germ plasma in the tropics. Animal disease present a major constraint to animal production in the tropical region and the extent of the losses due to disease is very high.

• Journal of Families and Better Life
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• v.22 no.6 s.72
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• pp.111-119
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• 2004

A rapid increase of the elderly population and changes in the social structure, family type and lifestyle bring us to the moment for considering the various aspects of supporting the elderly including the elderly housing facilities. Traditionally it is considered as a merit for a son to support parents in his own house. Hut recently the elderly increasingly want to live independently without support from their children. To satisfy these needs, new housing facilities for the elderly were developed by private non-profit foundations. A number of outstanding housing facilities for the elderly have been built in the last five years. These facilities show significant progress in housing for the elderly. Unfortunately, there u e no standard design checklists or guidelines for housing for the elderly available in Korea. The housing facilities were built based on foreign design guidelines or architect's experience. This research aims to develop an affordable design checklist that can meet the needs of the Korean elderly lifestyle. This study evaluated the senior residential facilities using Woo's checklist which consolidated the guidelines available here and abroad. As the result of this study, we presented the checklist subject in upper group $25\%, middle group, lower group $25\% distribution and 6, 5, 4, categories in order to importance. When designing the future senior residential facilities, a constraint can be made based on the scope and financial factors of the facility first and the determine how extensive the application of the checklist should be.