• KDI Journal of Economic Policy
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• v.14 no.2
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• pp.55-75
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• 1992

At the outset of import liberalization, most economists expected a significant drop in the prices of domestic goods that faced foreign competition. However, it is now generally acknowledge that a significant drop in prices of those goods has not occurred. A common claim is that the prices did not drop significantly because the major importers of many imported goods were also the domestic producers of competing goods. The objective of this paper is to analyze the welfare effect of importation by domestic firms that produce competing goods, to identify the factors that facilitate such business practices, and to formulate a policy that could improve the welfare. We proved that importation by competing domestic firms definitely raises the prices of both imported and domestic goods compared to the situation where foreign goods are imported by non-producers, ceteris paribus. The intuition behind this result is that since a producer-importer is essentially a cartel, its overall profit maximization requires reduced competition between the products that it sells. On the other hand, if a producer-importer is more efficient at distrinbution than a simple importer, the comparison between the two cases is a priori indeterminate. We also find that the industries in which domestic producers are actively involved in importing competing goods are the ones in which the distribution channels are tightly controlled by importer-producers. This finding suggests that exclusive dealing contracts, which work as an entry barrier, may be the source of importing by domestic producers. We argue that in a country such as Korea, where financial market is highly incomplete, tight control of the distribution channels by oligopolistic manufacturers is likely to be an effective entry barrier that leads to importing by domestic producers of similar goods. We further argue that seemingly superior distribution costs of importer-producers is likely to be a result of market foreclosure which would disappear once the entry barrier of exclusive dealing contracts is removed. Above findings suggest that market imperfections are the source of importation by domestic competitors, which in turn constitutes a market imperfection in itself and reduces consumer welfare. As potential remedies, we considered three alternatives; direct price control by the government over the imported goods sold by major domestic producers, regulation of trade itself between major producers, and regulation of exclusive dealing contracts. For reasons both theoretical and pratical, we find that the last alternative is the most attrative. Prohibiting exclusive contracts between manufacturers and dealers in industries where exclusive dealing contracts are a significant entry barrier is expected to break up the importer-producer cartel and improve the welfare.

• The Korean Journal of Air & Space Law and Policy
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• v.30 no.1
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• pp.117-149
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• 2015

On May 16, 2014 the Supreme Court of Korea rendered its decision with respect to litigation filed by All Nippon Airways Co., Ltd. ("ANA") for revocation of an order of correction and payment of a penalty imposed by the Korea Fair Trade Commission ("KFTC"). On or around September 2002, ANA and various airlines operating air cargo service from Japan to Korea were allegedly to have agree to introduce of fuel surcharge into their rates on cargo fares in an attempt to recoup falling profits from rising of oil price. As this hard core cartel was per se prohibited under Korean competition law (The Monopoly Regulation And Fair Trade Act), KFTC began an investigation and consequently with fruitful results imposed an amount of penalty and issued an order of prohibition. ANA protested against this imposition by filing suit against KFTC under the reasons that (1) their agreement was simply pursuant to the relevant laws and regulations including Air Transport Agreement between Korea and Japan, (2) there was an administrative guidance from Japanese government to allow this agreement, (3) extraterritorial application of Korean competition law to the agreement in this matter was improper as it was made within Japan and targeted only for the shipment from Japan to Korea: accordingly there is not a direct and serious effect between the agreement and any result of anti-competitive. This article aims to review ANA's allegation and the judgement delivered by Korean court under some issues respectively; (1) whether there is an effectively actual anti-competitive cartel between airlines including plaintiff, (2) whether filed rate doctrine is reasonable and applicable in this case for precluding wrongfulness, (3) what is the reasonable limitation of boundaries in extraterritorial application of Korean competition law. Additionally, this article also suggests to concern particular features of air transport business as an regulated industry in judging the unfair restrain on competition.

• Journal of Animal Environmental Science
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• v.11 no.3
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• pp.189-196
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• 2005

This study was carried out to determine the acceptability of liquid manure bin among livestock farmers and agricultural farmers, and quantify its malodorous compounds. The results were as follows; 1. The size of the manure bins owned by $93\%$ of 60 farmers surveyed was 200 M/T and were all in normal operation. Around $57\%$ of the normally operated bins were processed under aerobic condition. 2. Filly percent of the respondents utilized their liquid manure bin twice a year while $64\%$ used commercial microbial products to enhance maturity of their liquid manure and abatement of malodorous emissions. On the other hand, $43\%$ mentioned problems on the labor requirement, mechanical maintenance and lending cost of liquid manure processing and utilization, and the price of the commercial microbial products. 3. Malodorants emitted from livestock liquid manure bins and their boundary bin depended upon the livestock liquid manure processing condition. Within bin under the aerobic processing condition, Iso-valeric and propionic acid were ranged 0.012 to 0.07ppm and 0.17 to 2.85ppm, respectively. Within bin under the anoxic processing condition, n-butyric, n-valeric acid, and acetaldehyde were ranged 1.5 to 2.3ppm, 1.3 to 1.8ppm, and 0.8 to 2.1ppm, respectively. Malodorants emitted from the boundary of livestock liquid manure bins under the anoxic processing condition were detected the range of 0.4 to 0.9 ppm, more than the concentration of law regulation, as an acetaldehyde, but under the aerobic processing condition, they did not any detection.

• The Korean Society of Law and Medicine
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• v.20 no.3
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• pp.175-209
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• 2019

The bundled discounting which the dominant undertakings engage in is problematic in terms of competition restraint. Bundled discounts generally benefit not only buyers but also sellers. Specifically, bundled discounts usually costs a firm less to sell multiple products. In addition, Bundled discounts always provide some immediate consumer benefit in the form of lower prices. Therefore, competition authorities and courts should not be too quick to condemn bundled discounts and apply the neutral and objective standard in bundled discounting cases. Cascade Health v. Peacehealth decision starts ruling from this prerequisite. This decision pointed out that the dominant undertaking can exclude rivals through bundled discounting without pricing its products below its cost when rivals do not sell as great a number of product lines. So bundled discounting may have the anticompetitive impact by excluding less diversified but more efficient producers. This decision did not adopt Lepage case's standard which does not require the court to consider whether the competitor was at least as efficient of a producer as the bundled discounter. Instead of that, based on cost based approach, this decision said that the exclusionary element can not be satisfied unless the discounts result in prices that are below an appropriate measures of the defendant's costs. By adopting a discount attribution standard, this decision said that the full amount of the discounts should be allocated to the competitive products. As the seller can easily ascertain its own prices and costs of production and calculate whether its discounting practices exclude competitors, not the competitor's costs but the dominant undertaking's costs should be considered in applying discount attribution standard. This case deals with bundled discounting practice of multiple healthcare services by the dominant undertaking in healthcare market. Under the Korean healthcare system and public health insurance system, the price competition primarily exists in non-medical care benefits because public healthcare insurance in Korea is in combination with the compulsory medical care institution system. The cases that Monopoly Regulation and Fair Trade Law deals with, such as cartel and the abuse of monopoly power, also mainly exist in non-medical care benefits. The dominant undertaking's exclusionary bundled discounting in Korean healthcare markets may be practiced in the contracts between the dominant undertaking and private insurance companies with regards to non-medical care benefits.

• Journal of Distribution Research
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• v.15 no.5
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• pp.237-255
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• 2010

The Korean Pharmacist Law has limited the sales of medicine to pharmacies. This has caused difficulty in purchasing medicine late at night or on holidays, which has limited the range of customers' selections and accelerated customers' discomfort, accordingly. Also, the rapid progress of aging has quickly boosted medical expenses for seniors, and has served as a factor that aggravates the budget of national medical insurance. Meanwhile, advanced countries, including the USA and Japan, have allowed the sales of general medicine, of which the safety and efficacy have been tested, in general retail stores such as convenience stores or super markets from the perspective of supporting self-medication. In particular, Japan, which has a strong tendency of pursuing safety in the world, diversified sales channels for general medicine in order to control quickly rising medical expenses. As a result, Japan has achieved the effect of easing various regulations as follows in the economic and social fields. First, the increasing distribution channels of general medicine from pharmacies to general retail stores provoked a potential demand, which also expanded related markets. Second, the competition between sales channels resulted in the reduction of the price of medicine. Third, the growing sales channels of medicine have extended the options of consumers and, subsequently, the convenience in the use of consumers has increased. Fourth, the creation of a competitive environment owing to the diversification of sales channels has accelerated an effort to enhance corporate competitiveness. Fifth, the foundation of enhancing the financial soundness of medical expenses has been prepared through the formation of a self-medication environment. In 2000, the Korean population aged 65 or over exceeded 7%, and it is anticipated to be over 14% by 2018; thus, the increase of national medical expenses will be sped up. As a way of being prepared for the era of aging, we, just as other advanced countries, need to create a self-treatment environment by diversifying the sellers of general medicine, and, thus, reduce spending on personal medical expenses, enhance the financial soundness of national medical insurance, and, further, promote the welfare of consumers.

• Economic and Environmental Geology
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• v.51 no.1
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• pp.67-76
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• 2018

This study reviews three eco-friendly energy towns with hybrid thermal energy supply systems and borehole thermal energy storage (BTES) in Canada and Denmark. The district heating and cooling systems were designed by using multi-source energy for the higher efficiency and reliability as well as environment. ADEU (Alexandra District Energy Utility) located at the developing area in the city of Richmond, Canada was designed to supply district energy with the installation of 726 borehole heat exchangers (BHEs) and a backup boiler using natural gas. DLSC (Drake Landing Solar Community) located in the town of Okotoks, Canada is a district system to store solar thermal energy underground during the summer season by seasonal BTES with 144 BHEs. Brædstrup Solpark district heating system located in Denmark has been conducted energy supply from multiple energy sources of solar thermal, heat pump, boiler plants and seasonal BTES with 48 BHEs. These systems are designed based on social and economic benefits as well as nature-friendly living space according to the city based energy perspective. Each system has the energy center which distribute the stored thermal energy to each house for heating during the winter season. The BHE depth and ground thermal storage volume are designed by the heating and cooling load as well as the condition of ground water flow and thermophysical properties of the ground. These systems have been proved the reliance and economic benefits by providing consistent energy supply with competitive energy price for many years. In addition, the several expansions of the service area in ADEU and Brædstrup Solpark have been processed based on energy supply master plan. In order to implement this kind of project in our country, the regulation and policy support of government or related federal organization are required. As well as the government have to make a energy management agency associated with long-term supply energy plan.

• Journal of the Korean Institute of Gas
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• v.22 no.1
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• pp.37-44
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• 2018

As the international Maritime Organization is tightening up the emission regulation vessel, many countries and companies are pushing ahead the LNG fuel as one of long term solution for emission problems of ship. as a study on the way to conduct business for LNG bunkering around the world, this study was analyzed in view-point of business models focused on major countries such as Japan, China, Singapore, Europe and United States. The results of this study are as follows. China first established a nation-centered LNG bunkering policy. And then, the state and the energy company have been cooperating and carrying on LNG bunkering business for LNG fueled ships. Some countries in Europe and United States are in the process of LNG bunkering business mainly with private company. To obtain cheaper LNG fuel than bunker-C, the private company has a business model of LNG bunkering on their own LNG fueled ships, while securing LNG with high price competitiveness through partnership with middle class operators such us LNG terminal and natural gas liquefaction plant. Also, the LNG bunkering business around the world is focused on private companies rather than public corporations, but it was going to be focused on large energy companies because the initial cost required to build LNG bunkering infrastructure. Three models (TOTE model, Shell model, ENGIE model) of LNG bun kering business are currently being developed. It has been found that the way in which LNG bunkering business is implemented by different countries is applied differently according to the enterprise and national policy.

• Journal of Korean Ophthalmic Optics Society
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• v.16 no.3
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• pp.229-235
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• 2011

Purpose: The present study was performed to evaluate the safety of ophthalmic lenses in domestic market since eyeglasses wearers could be exposed to the negligent accident by damaged ophthalmic lenses. Method: Totally, 160 ophthalmic lenses (NK55, ${n_{d}}$ = 1.56) with the refractive powers of -3D, -6D, +3D, +6D manufactured by 4 companies in domestic market were evaluated using drop ball test. In accordance with FDA standard, steel ball (~16 g) was freely dropped on these ophthalmic lenses from 127 cm high and the surfaces of lenses were observed. Results: From the study, center thicknesses of NK55 ophthalmic lenses manufactured by 4 different companies showed somewhat different numbers even though the lenses had the same refractive index and powers. All convex lenses of +3D, +6D were evaluated as the safe lenses since there was no damage such as crack and broken found on the lens surfaces after drop ball testing. However, some noticeable broken was shown on the surfaces of concave lenses with relatively thinner center thickness. Especially, 59(73.8%) of total 80 concave lenses with the refractive power of -3D and -6D classified as unacceptable lenses to FDA standard. Conclusions: From the results, the negligent accident by damaged ophthalmic lenses should be considered as well as the correction of visual acuity, design and price when customers purchase eyeglasses. Thus, the enforcement regulation like drop ball testing of uncut ophthalmic lens could be suggested to guarantee the safety of ophthalmic lenses in domestic market.

• Journal of Ginseng Culture
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• v.5
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• pp.32-51
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• 2023

Because red ginseng was exported in large quantities to the Qing Dynasty in the 19th century, a large-scale ginseng cultivation complex was established in Kaesong. Sibyunje (時邊制), a privately led loan system unique to merchants in Kaesong, made it possible for them to raise the enormous capital required for ginseng cultivation. The imperial family of the Korean Empire promulgated the Posamgyuchik (包蔘規則) in 1895, and this signaled the start of the red ginseng monopoly system. In 1899, when the invasion of ginseng farms by the Japanese became severe, the imperial soldiers were sent to guard the ginseng farms to prevent the theft of ginseng by the Japanese. Furthermore, the stateled compensation mission, Baesanggeum Seongyojedo (賠償金 先交制度), provided 50%-90% of the payment for raw ginseng, which was paid in advance of harvest. In 1895, rising seed prices prompted some merchants to import and sell poor quality seeds from China and Japan. The red ginseng trade order was therefore promulgated in 1920 to prohibit the import of foreign seeds without the government's permission. In 1906-1910, namely, the early period of Japanese colonial rule, ginseng cultivation was halted, and the volume of fresh ginseng stocked as a raw material for red ginseng in 1910 was only 2,771 geun (斤). However, it increased significantly to 10,000 geun between 1915 and 1919 and to 150,000 geun between 1920 and 1934. These increases in the production of fresh ginseng as a raw material for red ginseng were the result of various policies implemented in 1908 with the aim of fostering the ginseng industry, such as prior disclosure of the compensation price for fresh ginseng, loans for cultivation expenditure in new areas, and the payment of incentives to excellent cultivators. Nevertheless, the ultimate goal of Japanese imperialism at the time was not to foster the growth of Korean ginseng farming, but to finance the maintenance of its colonial management using profits from the red ginseng business.

• Korean small business review
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• v.31 no.2
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• pp.85-102
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• 2009

With the continued globalization of world markets, transfer pricing has become one of the dominant sources of controversy in international taxation. Transfer pricing is the process by which a multinational corporation calculates a price for goods and services that are transferred to affiliated entities. Consider a Korean electronic enterprise that buys supplies from its own subsidiary located in China. How much the Korean parent company pays its subsidiary will determine how much profit the Chinese unit reports in local taxes. If the parent company pays above normal market prices, it may appear to have a poor profit, even if the group as a whole shows a respectable profit margin. In this way, transfer prices impact the taxable income reported in each country in which the multinational enterprise operates. It's importance lies in that around 60% of international trade involves transactions between two related parts of multinationals, according to the OECD. Multinational enterprises (hereafter MEs) exert much effort into utilizing organizational advantages to make global investments. MEs wish to minimize their tax burden. So MEs spend a fortune on economists and accountants to justify transfer prices that suit their tax needs. On the contrary, local governments are not prepared to cope with MEs' powerful financial instruments. Tax authorities in each country wish to ensure that the tax base of any ME is divided fairly. Thus, both tax authorities and MEs have a vested interest in the way in which a transfer price is determined, and this is why MEs' international transfer prices are at the center of disputes concerned with taxation. Transfer pricing issues and practices are sometimes difficult to control for regulators because the tax administration does not have enough staffs with the knowledge and resources necessary to understand them. The authors examine transfer pricing practices to provide relevant resources useful in designing tax incentives and regulation schemes for policy makers. This study focuses on identifying the relevant business and environmental factors that could influence the international transfer pricing of MEs. In this perspective, we empirically investigate how the management perception of related variables influences their choice of international transfer pricing methods. We believe that this research is particularly useful in the design of tax policy. Because it can concentrate on a few selected factors in consideration of the limited budget of the tax administration with assistance of this research. Data is composed of questionnaire responses from foreign firms in Korea with investment balances exceeding one million dollars in the end of 2004. We mailed questionnaires to 861 managers in charge of the accounting departments of each company, resulting in 121 valid responses. Seventy six percent of the sample firms are classified as small and medium sized enterprises with assets below 100 billion Korean won. Reviewing transfer pricing methods, cost-based transfer pricing is most popular showing that 60 firms have adopted it. The market-based method is used by 31 firms, and 13 firms have reported the resale-pricing method. Regarding the nationalities of foreign investors, the Japanese and the Americans constitute most of the sample. Logistic regressions have been performed for statistical analysis. The dependent variable is binary in that whether the method of international transfer pricing is a market-based method or a cost-based method. This type of binary classification is founded on the belief that the market-based method is evaluated as the relatively objective way of pricing compared with the cost-based methods. Cost-based pricing is assumed to give mangers flexibility in transfer pricing decisions. Therefore, local regulatory agencies are thought to prefer market-based pricing over cost-based pricing. Independent variables are composed of eight factors such as corporate tax rate, tariffs, relations with local tax authorities, tax audit, equity ratios of local investors, volume of internal trade, sales volume, and product life cycle. The first four variables are included in the model because taxation lies in the center of transfer pricing disputes. So identifying the impact of these variables in Korean business environments is much needed. Equity ratio is included to represent the interest of local partners. Volume of internal trade was sometimes employed in previous research to check the pricing behavior of managers, so we have followed these footsteps in this paper. Product life cycle is used as a surrogate of competition in local markets. Control variables are firm size and nationality of foreign investors. Firm size is controlled using dummy variables in that whether or not the specific firm is small and medium sized. This is because some researchers report that big firms show different behaviors compared with small and medium sized firms in transfer pricing. The other control variable is also expressed in dummy variable showing if the entrepreneur is the American or not. That's because some prior studies conclude that the American management style is different in that they limit branch manger's freedom of decision. Reviewing the statistical results, we have found that managers prefer the cost-based method over the market-based method as the importance of corporate taxes and tariffs increase. This result means that managers need flexibility to lessen the tax burden when they feel taxes are important. They also prefer the cost-based method as the product life cycle matures, which means that they support subsidiaries in local market competition using cost-based transfer pricing. On the contrary, as the relationship with local tax authorities becomes more important, managers prefer the market-based method. That is because market-based pricing is a better way to maintain good relations with the tax officials. Other variables like tax audit, volume of internal transactions, sales volume, and local equity ratio have shown only insignificant influence. Additionally, we have replaced two tax variables(corporate taxes and tariffs) with the data showing top marginal tax rate and mean tariff rates of each country, and have performed another regression to find if we could get different results compared with the former one. As a consequence, we have found something different on the part of mean tariffs, that shows only an insignificant influence on the dependent variable. We guess that each company in the sample pays tariffs with a specific rate applied only for one's own company, which could be located far from mean tariff rates. Therefore we have concluded we need a more detailed data that shows the tariffs of each company if we want to check the role of this variable. Considering that the present paper has heavily relied on questionnaires, an effort to build a reliable data base is needed for enhancing the research reliability.