• Journal of Labour Economics
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• v.40 no.1
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• pp.1-36
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• 2017

This study aimed to analyze influencing factors to increase the wage differential between large enterprise and subcontracted small-medium enterprises by using panel data composed of 19 manufacturing industries for 16 years from 1999 to 2014. According to the results of analysis, in large enterprises the elasticity of substitution between the labor inputs and the subcontracted product supplies from small-medium enterprises was significantly less than 1. So, the increase in wages of workers of large enterprises, whose degree of employment protection was relatively high, seemed to increase the share of wage cost in total cost and was resulted to decrease the cost share of subcontracted product supplies significantly. This was interpreted to be able to exert a negative influence upon the price of subcontracted product supplies and the wages of workers in subcontracted small-medium enterprises, and, therefore, to increase the wage differentials between large enterprises and subcontracted small-medium enterprises. Furthermore, it was also found that the increases in the labor union participation rate at large enterprises and the openness rate of the industry concerned were contributing to make such effects much stronger significantly. In order to mitigate the wage differentials and the polarizing trend in labor market, we can suggest to establish a certain kind of flexible wage system and to introduce co-bargaining practices with the workers of subcontracted small-medium enterprises within large enterprises, and also for the workers of small-medium enterprises, to prepare new social systems to upgrade their human resources and job skills drastically.

• International Commerce and Information Review
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• v.12 no.4
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• pp.193-211
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• 2010

These days, Korean government has been expanding Free Trade Agreement (FTA) with major countries. Expansion of FTA, which means opening up the markets, can be the opportunity to develop for those enterprises with global competency; however, it surely brings disadvantages to such small and medium enterprises which function as an outsourcing and a subcontracted to large enterprises. For Korean economy to overcome the national income of US$20,000 and to jump up to the level of advanced countries, it is imperative to perceive a limit to the large enterprises only. Not only the leading efforts of small and medium enterprises to double the exports, but also realizing the policy reform for the consistent and intimate policy between the government and companies have to be proceeded. Therefore, primarily in this study, first, it includes the overview of the change in trade-environment in an era of FTA, governmental system and policy to support export for the small and medium enterprises; secondly, examination of the export capacity and some problematic factors in export for small and medium enterprises. Ultimately, it is suggested both reinforcement for global competency of the small and medium enterprises and an alternative policy for the support system in the time expecting export expansion.