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Corporate Default Prediction Model Using Deep Learning Time Series Algorithm, RNN and LSTM (딥러닝 시계열 알고리즘 적용한 기업부도예측모형 유용성 검증)

  • Cha, Sungjae;Kang, Jungseok
    • Journal of Intelligence and Information Systems
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    • v.24 no.4
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    • pp.1-32
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    • 2018
  • In addition to stakeholders including managers, employees, creditors, and investors of bankrupt companies, corporate defaults have a ripple effect on the local and national economy. Before the Asian financial crisis, the Korean government only analyzed SMEs and tried to improve the forecasting power of a default prediction model, rather than developing various corporate default models. As a result, even large corporations called 'chaebol enterprises' become bankrupt. Even after that, the analysis of past corporate defaults has been focused on specific variables, and when the government restructured immediately after the global financial crisis, they only focused on certain main variables such as 'debt ratio'. A multifaceted study of corporate default prediction models is essential to ensure diverse interests, to avoid situations like the 'Lehman Brothers Case' of the global financial crisis, to avoid total collapse in a single moment. The key variables used in corporate defaults vary over time. This is confirmed by Beaver (1967, 1968) and Altman's (1968) analysis that Deakins'(1972) study shows that the major factors affecting corporate failure have changed. In Grice's (2001) study, the importance of predictive variables was also found through Zmijewski's (1984) and Ohlson's (1980) models. However, the studies that have been carried out in the past use static models. Most of them do not consider the changes that occur in the course of time. Therefore, in order to construct consistent prediction models, it is necessary to compensate the time-dependent bias by means of a time series analysis algorithm reflecting dynamic change. Based on the global financial crisis, which has had a significant impact on Korea, this study is conducted using 10 years of annual corporate data from 2000 to 2009. Data are divided into training data, validation data, and test data respectively, and are divided into 7, 2, and 1 years respectively. In order to construct a consistent bankruptcy model in the flow of time change, we first train a time series deep learning algorithm model using the data before the financial crisis (2000~2006). The parameter tuning of the existing model and the deep learning time series algorithm is conducted with validation data including the financial crisis period (2007~2008). As a result, we construct a model that shows similar pattern to the results of the learning data and shows excellent prediction power. After that, each bankruptcy prediction model is restructured by integrating the learning data and validation data again (2000 ~ 2008), applying the optimal parameters as in the previous validation. Finally, each corporate default prediction model is evaluated and compared using test data (2009) based on the trained models over nine years. Then, the usefulness of the corporate default prediction model based on the deep learning time series algorithm is proved. In addition, by adding the Lasso regression analysis to the existing methods (multiple discriminant analysis, logit model) which select the variables, it is proved that the deep learning time series algorithm model based on the three bundles of variables is useful for robust corporate default prediction. The definition of bankruptcy used is the same as that of Lee (2015). Independent variables include financial information such as financial ratios used in previous studies. Multivariate discriminant analysis, logit model, and Lasso regression model are used to select the optimal variable group. The influence of the Multivariate discriminant analysis model proposed by Altman (1968), the Logit model proposed by Ohlson (1980), the non-time series machine learning algorithms, and the deep learning time series algorithms are compared. In the case of corporate data, there are limitations of 'nonlinear variables', 'multi-collinearity' of variables, and 'lack of data'. While the logit model is nonlinear, the Lasso regression model solves the multi-collinearity problem, and the deep learning time series algorithm using the variable data generation method complements the lack of data. Big Data Technology, a leading technology in the future, is moving from simple human analysis, to automated AI analysis, and finally towards future intertwined AI applications. Although the study of the corporate default prediction model using the time series algorithm is still in its early stages, deep learning algorithm is much faster than regression analysis at corporate default prediction modeling. Also, it is more effective on prediction power. Through the Fourth Industrial Revolution, the current government and other overseas governments are working hard to integrate the system in everyday life of their nation and society. Yet the field of deep learning time series research for the financial industry is still insufficient. This is an initial study on deep learning time series algorithm analysis of corporate defaults. Therefore it is hoped that it will be used as a comparative analysis data for non-specialists who start a study combining financial data and deep learning time series algorithm.

A Study on the Strategy for Enhancing the Service Export linked with Manufacturing Sector : focused on Stage System and Special Lighting Service (제조-서비스 연계형 수출상품화 모델 개발전략 - 무대장치 및 특수조명서비스 수출산업을 중심으로 -)

  • Park, Moon-Suh
    • International Commerce and Information Review
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    • v.10 no.4
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    • pp.457-491
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    • 2008
  • As stage equipment export markets along with special lighting service lack the attraction for already globally established businesses, such markets can be viewed as an advantageous opportunity for SMEs as in general. In reality, global businesses tend to focus on large construction projects and this indicates relatively less substantial markets such as stage equipment and special lighting service export are more suitable for SME businesses. However, possible problems may be recognized as following; doubtful capabilities by such businesses to join in the vast and competitive global market and pursue manufacturing and service based export. This point is also supported by the fact that such in general SME businesses have substantially less experience in exporting products and services abroad. Realizing the distinctive features of the Korean economy, it is unarguable that every sector and area of global market must be regarded and monitored closely. Hence, it can be argued that there is an imminent need for establishment of supportive institution to assist export process of combination of stage equipments and special lighting service. This study emphasizes the need to improve export process of stage equipments, special lighting services as well as other related products and services which have been focused in domestic market only until now. Further, it also analyzed the potential prospect of such direction reconciling current crisis our manufacturing industry is facing. Even though it maybe regarded as one of the niche market for export of Korea in the short term view, stage equipment and special lighting service industry may rapidly grow as the global cultural industries have grown along with the increase of national income earnings overall. Due to such advantageous features, it can be expected that such industries will show strong growth in the near future. After analyzing the fact that Korea's plants (eg. powerplants) export sector is at its boom, there is a need to transform stage equipment and special lighting service export market into a primary market from a secondary(niche) market for SMEs. This study is viewed from the Korean economic and export sector aspect in the aim of seeking a solution to conquest our realistic limit in our export sector by developing a suitable export model. There have been cases of very few attempts to expand abroad by SMEs who have failed miserably due to their failure to adapt to foreign culture, practice and languages as well as substantial lack in experience in export marketing. Despite this, neglecting our manufacturing industry as it is which is showing its limit and problems is out of option therefore, it is imminent that we come up with an effective measure to address this problem and service export can be suggested as one of them. This study reveals manufacturing-service export model of stage equipment and special lighting service and its related areas is recognized as a field with a very strong future and furthermore, it is expected to bring synergy effects in manufacturing and services sector as well. Further, the operation strategy contains combination, composition and fusion(convergence) of manufacturing and service sectors which could derive various of export products which displays greater success probability or this export model. The outcome of this research is expected to become a useful source for enterprises related to such industry which are seeking a possible global expansion. Furthermore, it is also expected to become a catalyst which fastens the process of global expansion and not only that, we are firmly assured that this study will become an opportunity to improve our current policies and institutions related to this area's export market.

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Feasibility Study on Remodeling Project By Using Real Option Model : Focusing on Apartment House Remodeling (실물옵션을 활용한 공동주택 리모델링 사업성 평가에 관한 연구 - 아파트 리모델링 사례를 중심으로 -)

  • Yeon, JungHoon;Lee, Hyun-Soo;Park, Moonseo;Kim, Sooyoung;Ahn, Joseph
    • Korean Journal of Construction Engineering and Management
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    • v.15 no.1
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    • pp.39-50
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    • 2014
  • After the global financial crisis, domestic construction industry has gone through a rapid recession. This resulted in gradual market shift towards architectural remodeling. Architectural remodeling not only improves residential environment but it has many advantages such as increase of each unit's exclusive area, free space within the horizontal or extension of an annex building, and increase number of household through splitting the household of bigger pyeong, etc. However, in case of the Korean market for apartment remodeling, due to various regulations and problem with business promotion procedures, majority of business is slow despite the figure that remodeling volume is not that small. Also, feasibility study which decides to push ahead public house remodeling business will have a flaw using net present value's law; it has a flaw of not considering properties of each phase of remodeling business and future's uncertainty. Hence, this research will improve the problem of traditional value assessment method of net present value's law. It will also consider one of the real options such as binomial model in order to supplement NPV which is used in current feasibility study. This research was based on real successful cases of public house remodeling and it was possible for feasibility study which was more realistic and valid. This research provided foundation for development of Korean public house remodeling market. There is high anticipation of increasing the validity by improving the problems of current feasibility study and economic efficiency assessment.

The Scale of Households in Negative Housing Equity and Policy Direction (하우스푸어 규모 추정 및 정책 방향에 대한 고찰)

  • Choi, Eun-Hee;Lee, Jong-Kwon;Moon, Hyo-Gon;Kim, Kyeong-Mi
    • Land and Housing Review
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    • v.5 no.4
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    • pp.259-269
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    • 2014
  • After global financial crisis, the ratio of household debt to GDP was decreasing in other advanced countries such as the U.S., and the U.K. and so on. But, in Korea, household debt (of which residential mortgage loan account for a large part) ratio is still increasing. This paper focuses on the scale and characteristics of households in negative housing equity (those are called House-poors in Korea), and also the socio-economic backgrounds of the formation process. In financial perspective, the problem of negative housing equity depends on financial debt repayment capability. We used DSR (Debt Service Ratio) and LTA (Loan to Asset ratio) as financial indicators to evaluate the debt repayment capability. The critical value of DSR is assumed as 40%, and LTA 100%. The socio-economic backgrounds of the House-poors are as follows : increasing households debt dependency, over lending competition of financial institutions and unreasonable loan in household economy, instability of real estate market, week regulation on mortgage loan. Finally, this paper suggests some implications about the range and the target of public intervention.

The Influence of Senior Entrepreneurial Decision Making Types and Entrepreneurial Supporting Policy on Start-up Performance (시니어 창업의사결정유형과 창업지원사업이 창업성과에 미치는 영향)

  • Ryu, Sang-Jung;Yang, Hae-Sool
    • Journal of the Korea Academia-Industrial cooperation Society
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    • v.17 no.4
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    • pp.106-121
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    • 2016
  • While economic crises are happening internationally due to the global financial crisis and the long-term recession of the domestic economy, South Korea is also experiencing an aging society with the retirement of the baby-boomers and a low birth-rate. The rapid retirement of baby-boomers, which is one of the essential parts of the Korean economy, is ongoing. Consequently, the number of seniors showing interest in entrepreneurship, as a way to avoid the economic threat, is increasing. Therefore, this study examined the correlation between two factors and its success, which can be stated as the influence of decision making in entrepreneurship and the influence of promotion policies to entrepreneurship. A survey was taken from 393 people, who received academic and managerial assistance from the Senior-Founded Support Center of Small Business Market Corporation and Adults Incubators of Seoul-Business Agency. and 'Hypothesis 1-1' and 'Hypothesis 2-2' were selected, because a positive effect was derived at each verification process. As a result, under the decision making types of entrepreneurship, only a reasonable type showed a positive effect at both the financial outcome and non-financial outcome of success, and the intuitive type was affected positively by the non-financial outcome. In addition, under the entrepreneur supporting business, among financial support, managerial support and educational support only managerial support had a positive effect.

A Study on the Start-up and Growth Business Model of Small and Medium-Sized Manufacturing Enterprises: Hyunsung Techno (제조기업의 창업과 성장의 비즈니스 모델 연구: 현성테크노)

  • Choi, In-Hyok;Kim, Do-Yeon
    • Asia-Pacific Journal of Business Venturing and Entrepreneurship
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    • v.14 no.6
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    • pp.103-117
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    • 2019
  • Under the uncertainties and the consequent turmoils of the IMF financial crisis in Korea, Hyunsung Techno was founded in 1997 on the basis of automobile press molding which is critical for the quality of automobile. Ever since, Hyunsung Techno has grown rapidly based on the domestic market; however, gradually, it had faced a stalemate in terms of the saturation, on the supply side and the growth limit, on the demand side, of the domestic molding market. Accordingly, Hyunsung pushed for a strategy to localize overseas markets and a new acquisition strategy instead of resting on the domestic mold industry's growth, and the success of these strategies enabled it to leap forward into a global company with five companies including affiliates and 70 billion won in sales. The main reason why Hyunsung Techno evolved from a small and medium-sized manufacturing company into a global businesses is due to the success of Boa Constrictor M&A strategy. Its acquisition strategy is not just a successful case of any acquisition, but a rare, maybe the first domestic case of a successful acquisition of a primary supplier by a secondary supplier. Through the success of this strategy, Hyunsung Techno has achieved a continuous growth of businesses, an increase in sales volume, and expansion into new businesses. And on top of that, this achievements is leading it to be a global conglomerate In this study, Hyunsung Techno's success strategy, which is transformed from a small domestic manufacturing company into a global enterprise, was analyzed in detail with its development stages divided into start-up, overseas expansion, acquisitions, and business diversification. Eventually, this case study is meant to offer strategic implications for other small and medium-sized businesses under the current, gloomy economy of low or zero growth of today.

A Study on the BOP Market In India (인도 빈곤층(BOP)시장의 현황과 시장분석에 관한 연구)

  • Lee, Jong-Won
    • International Commerce and Information Review
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    • v.13 no.2
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    • pp.51-73
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    • 2011
  • Because of the slowdown in economic growth of developed countries, emerging countries are appearing as the new global market. Each country is paying attention to the BOP market of emerging countries to substitute for the markets of import demand of advanced countries due to the global financial crisis. Europe and Japanese corporations are set on taking over the BOP markets, highly appreciating the potential of BOP market. Now it is high time that Korea should recognize the possibility of BOP market and analyze emerging countries and set up strategic planning to react to them. China and India have the highest latent ability as emerging countries in Asia. Korea is well positioned within the market thanks to the conclusion of CEPA with India. Therefore, the government and leading conglomerates need to establish an effective model with which to advance their existing market entry strategy to approach the BOP market of India in the mid to long term. That is, they have to set up a TMB model which fits India such as marketing competence, an on-site adaptability, quick decision making, and constructing a close and customized strategy for all the social stratum of India's population. Establishing a TMB model in India will be the bridgehead to advancing the BOP market to neighboring countries which will allow us to extend our reach to other countries in South Asia and the world BOP market hereafter.

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A study on the relationship between the onshore and offshore Chinese Yuan markets (중국 역내·외 위안화 현물시장간의 상호 연계성 연구)

  • Lee, Woosik;Chun, Heuiju
    • Journal of the Korean Data and Information Science Society
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    • v.26 no.6
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    • pp.1387-1395
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    • 2015
  • Since the financial crisis of 2008, the People's Republic of China has aggressively been pursuing the internationalization of the Chinese Yuan or Renminbi. In this regard, rapidly increasing use of the Chinese Yuan in the onshore and offshore markets are important milestones. This paper analyzes relationship between the onshore and offshore Chinese Yuan spot markets. Major findings of this paper are as follows : First, there is full feedback relationship between the Onshore and Offshore Chinese Yuan Markets. Second, the difference between the yuan's offshore exchange rate and the onshore was getting tight. Third, the offshore Yuan market affects on the onshore market based on the empirical tests.

Looking for More Space-sensitive Korean Studies (한국학 연구에서 사회-공간론적 관점의 필요성에 대한 소고)

  • Park, Bae-Gyoon
    • Journal of the Korean Geographical Society
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    • v.47 no.1
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    • pp.37-59
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    • 2012
  • Korean studies are in crisis because they have fallen prey to the territorial trap associated with methodological territorialism and methodological nationalism. In order to overcome this situation, this paper suggests the studies on Korea to be more active in accepting the socio-spatial perspective that emphasize the inseparability of society and space. In particular, paying special attention to the 4 important dimensions of socio-spatial relations, such as place, territory, network and scale, it examines the ways in which these 4 dimensions are overlapped, interconnected and dynamically interacting with one another from the perspective of "multi-scalar networked territoriality". In conclusion, I argue that the Korean studies need to understand the variegated and multi-scalar nature of Korea, a place, which is constituted through complex interactions among diverse political, social, economic and cultural forces and processes that operate in various places and at diverse geographical scales.those days, such as agriculture, crops, and transportation of goods. Fifth, the bibliography and citations explaining all instances reveal that China (Qing) is a great civilization of the advanced world and that the scholarship of Joseon relied on and accepted it. Sixth, except for horse raising and management, farming implements for rice transplantation, sericulture, and natural dying of cloth, most of the topics are useful even today. In short, theres is a profound aspect to the content that makes it possible to estimate the "geographical thinking". In general, the focus of the content of this book directly linked to the practical agricultural economy of the common people.

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Comparative Analysis of COVID-19 Pandemic Crisis Response Capacities by Countries (코로나19 팬데믹 위기 대응 역량의 국가별 비교분석)

  • Yoon Hyeon Lee
    • The Journal of Korean Society for School & Community Health Education
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    • v.25 no.2
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    • pp.59-70
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    • 2024
  • Objectives: The purpose of this study is to analyze each country's infectious disease response capacities and, based on this, find areas for improvement in Korea's infectious disease management response. Methods: First, the capacity to respond to the COVID-19 infectious disease was analyzed by country using the SPAR scores of 96 countries around the world released by WHO in 2022. Second, we analyzed each country's specific COVID-19 quarantine performance using Our World in Data and the Global Health Security Index (GHSI). Results: First, the quarantine intensity index on January 24, 2021 was the highest in the Southeast Asia branch at 67.6, which had strong quarantine measures, and the lowest at 44.5 in the Africa branch. As of December 31, 2022, the quarantine intensity index in Europe was significantly lowered to 11.6. Second, the factor that influenced the SPAR indicator on the total number of patients per million population was national laboratory (C4), p=.027, and the factor that influenced the total number of deaths per million population was infection prevention and control (C9), p=.005., Risk Communication and Community Participation (C10) p=.040. The influential factor on GDP per capita was infection prevention and control (C9) p=.009, and the influential factor on GHSI was infection prevention and control (C9) p=.002. Conclusion: The research findings indicate that it was difficult to find a correlation between the SPAR, which is each country's self-assessment of their infectious disease capacities, and the number of COVID-19 cases or the intensity of pandemic responses. However, mortality rates, as well as factors such as the Global Health Security Index (GHSI) and national income, appear to be somewhat influenced. For future improvements in infectious disease management and response in our country, it is necessary to develop pandemic strategies that can reduce socio-economic costs based on more scientific and reliable data like JEE or GHSI, especially in preparation for potential unknown emerging infectious diseases. Based on this, proactive decision-making led by a control tower of experts and effective health communication are also required to respond to public health crises at a national level.