• 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.

• Korean Journal of Heritage: History & Science
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• v.44 no.4
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• pp.172-205
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• 2011

Go bears significant meanings in terms of cultural and entertaining functions in Asia Eastern such as China and Japan. Beyond the mere entertaining level, it produces philosophical and mythic discourse as well. As a part of effort to seek an identity of Korean traditional garden culture, this study traced back to find meanings of rock-go-board and taste for the arts which ancestors pursued in playing Go game, through analysis and interpretation of correlation among origin of place name, nearby scenery, carved letters and vicinal handed-down place name. At the same time, their position, shape and location types were interpreted through comprehensive research and analysis of stone-go-boards including rock-go-board. Particularly, it focused on the rock names related to Sundoism(仙道) Ideal world, fixed due to a connection between traces of Sundoism and places in a folk etymology. Series of this work is to highlight features of the immortal sceneries, one of traditional landscaping ideals, by understanding place identity and scenic features of where the rock-go-boards are carved. These works are expected to become foundation for promotion and preservation of the traditional landscaping remains. The contents of this study could be summarized as follows; First, round stone and square board for round sky and angled land, black and white color for harmony of yin and yang and 361paths for rotating sky are symbols projecting order of universe. Sayings of Gyuljungjirak(橘中之樂), Sangsansaho(商山四皓), Nangagosa(爛柯故事) formed based on the idea of eternity stand for union of sky and sun. It indicates Go game which matches life and nature spatiotemporally and elegant taste for arts pursuing beauty and leisure. Second, the stone-go-boards found through this research, are 18 in total. 3 of those(16.1%), Gangjin Weolnamsaji, Yangsan Sohanjeong and Banryongdae ones were classified into movable Seokguk and 15(83.9%) including Banghakdong were turned out to be non-movable rock-go-boards carved on natural rocks. Third, upon the result of materializing location types of rock-go-boards, 15 are mountain stream type(83.9%) and 3 are rock peak type(16.1%). Among those, the one at Sobaeksam Sinseonbong is located at the highest place(1,389m). Considering the fact that all of 15 rock-go-boards were found at mountainous areas lower than 500m, it is recognizable that where the Go-boards are the parts of the living space, not far from secular world. Fourth, there are 7 Sunjang(巡將) Go with 17 Hwajeoms(花點), which is a traditional Go board type, but their existences, numbers and shapes of Hwajeom appear variously. Based on the fact, it is recognizable that culture of making go-board had been handed down for an extended period of time. Among the studied rock-goboards, the biggest one was Muju Sasunam[$80(82)cm{\times}80(82)cm$] while the smallest one was Yangsan Sohandjeong Seokguk ($40cm{\times}40cm$). The dimension of length and breadth are both $49cm{\times}48cm$ on average, which is realistic size for actual Go play. Fifth, the biggest bed rock, an under-masonry with carved Go-board on it, was one in Muju Sasunam[$8.7m{\times}7.5m(65.25m^2)$], followed by ones in Hoengseong Chuiseok[$7.8m{\times}6.3m(49.14m^2$] and Goisan Sungukam[$6.7m{\times}5.7m(37.14m^2)$]. Meanwhile, the smallest rock-go-board was turned out to be one in Seoul Banghak-dong. There was no consistency in directions of the Go-boards, which gives a hint that geographical features and sceneries of locations were considered first and then these were carved toward an optimal direction corresponding to the conditions. Sixth, rock-go-boards were all located in valleys and peaks of mountains with breathtaking scenery. It seems closely related to ancestors' taste for arts. Particularly, rock-go-boards are apprehended as facilities related to taste for arts for having leisure in many mountains and big streams under the idea of union of sky and human as a primitive communal line. Go became a medium of hermits, which is a traditional image of Go-game, and symbol of amusement and entertainment with the idea that Go is an essence of scholar culture enabling to reach the Tao of turning back to nature. Seventh, the further ancient time going back to, the more dreamlike the Go-boards are. It is an evident for that Sundoism, which used to be unacceptable once, became more visible and realistic. Considering the high relation between rock-go-boards and Sundoism relevant names such as Sundoism peak in Danyang Sobaeksan, 4 hermits rock in Muju and Sundoism hermit rock in Jangsu, Sundoism hermit rocks and rock-go-boards are sceneries and observation spots to express a communication of worship and longing for Sundoism. Eighth, 3 elements-physical environment such as location type of the rock-go-boards, human activities concentrated on 8 sceneries and Dongcheongugok(洞天九曲) setup and relevancy to Confucian scholars, as well as 'Sangsansaho' motif and 'Nangagosa' symbolic meaning were used as interpretation tools in order to judge the place identity. Upon the result, spatial investigation is required with respect to Sunyoodongcheon(仙遊洞天) concept based on enjoyment to unify with the nature rather than Dongcheongugok concept of neo-Confucian, for Dongcheon and Dongmoon(洞門) motives carved around the rock-go-boards. Generally, places where mountain stream type rock-go-boards were formed were hermit spaces of Confucianism or Sundoism. They are considered to have compromised one other with the change of times. Particularly, in the rock-go-board at the mountain peak, sublimity-oriented advent of Sundoism is considered as a significant factor to control place identity. Ninth, including where the rock-go-boards were established, the vicinal areas are well-known as parts of Dongcheongugok and Palkyung(八景) mostly. In addition, many of Sundoism relevant expressions were discovered even in the neighboring carvings written by scholars and nobility, which means sophisticated taste based on longing for Sundoism world played a significant role in making go-board. The rock-go-board is an integration of cultural phenomena naturally managed by seclusion of scholars in the Joseon Dynasty as well as remains and essence of Korean traditional landscaping. Some rock-go-boards out of 17 discovered in South Korea, including ones in Sobaeksan Sinsunbong, Banghak-dong, Chungju Gongili, Muju Sasunam, Yangsan Eogokdong Banryongdae Seokguk, are damaged such as cracks in rocks or fainted lines by hardships of time and hand stains. Worse yet, in case of Eunyang Bangudae Jipcheongjeong board, it is very difficult to identify the shape due to being buried. Rock-go-boards are valuable sculptures in terms of cultural asset and artwork since they reflect ancestors' love for nature and longing for Sundoism world. Therefore, they should be maintained properly with right preservation method. Not only rock-boards itself but also peripheral places are excellent cultural heritages and crucial cultural assets. In addition, vicinal sceneries of where rock-goboards and pavilion spots are the representative remains of embracing prototype of Korean traditional landscaping and major parts of cultural properties.

• Journal of Preventive Medicine and Public Health
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• v.20 no.1 s.21
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• pp.165-203
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• 1987

This project was a service-cum-research effort with a quasi-experimental study design to examine the health benefits of an integrated Family Planning (FP)/Maternal & Child health (MCH) Service approach that provides crucial factors missing in the present on-going programs. The specific objectives were: 1) To test the effectiveness of trained nurse/midwives (MW) assigned as change agents in the Health Sub-Center (HSC) to bring about the changes in the eight FP/MCH indicators, namely; (i)FP/MCH contacts between field workers and their clients (ii) the use of effective FP methods, (iii) the inter-birth interval and/or open interval, (iv) prenatal care by medically qualified personnel, (v) medically supervised deliveries, (vi) the rate of induced abortion, (vii) maternal and infant morbidity, and (viii) preinatal & infant mortality. 2) To measure the integrative linkage (contacts) between MW & HSC workers and between HSC and clients. 3) To examine the organizational or administrative factors influencing integrative linkage between health workers. Study design; The above objectives called for quasi-experimental design setting up a study and control area with and without a midwife. An active intervention program (FP/MCH minimum 'package' program) was conducted for a 2 year period from June 1982-July 1984 in Seosan County and 'before and after' surveys were conducted to measure the change. Service input; This study was undertaken by the Soonchunhyang University in collaboration with WHO. After a baseline survery in 1981, trained nurses/midwives were introduced into two health sub-centers in a rural setting (Seosan county) for a 2 year period from 1982 to 1984. A major service input was the establishment of midwifery services in the existing health delivery system with emphasis on nurse/midwife's role as the link between health workers (nurse aids) and village health workers, and the referral of risk patients to the private physician (OBGY specialist). An evaluation survey was made in August 1984 to assess the effectiveness of this alternative integrated approach in the study areas in comparison with the control area which had normal government services. Method of evaluation; a. In this study, the primary objective was first to examine to what extent the FP/MCH package program brought about changes in the pre-determined eight indicators (outcome and impact measures) and the following relationship was first analyzed; b. Nevertheless, this project did not automatically accept the assumption that if two or more activities were integrated, the results would automatically be better than a non-integrated or categorical program. There is a need to assess the 'integration process' itself within the package program. The process of integration was measured in terms of interactive linkages, or the quantity & quality of contacts between workers & clients and among workers. Intergrative linkages were hypothesized to be influenced by organizational factors at the HSC clinic level including HSC goals, sltrurture, authority, leadership style, resources, and personal characteristics of HSC staff. The extent or degree of integration, as measured by the intensity of integrative linkages, was in turn presumed to influence programme performance. Thus as indicated diagrammatically below, organizational factors constituted the independent variables, integration as the intervening variable and programme performance with respect to family planning and health services as the dependent variable: Concerning organizational factors, however, due to the limited number of HSCs (2 in the study area and 3 in the control area), they were studied by participatory observation of an anthropologist who was independent of the project. In this observation, we examined whether the assumed integration process actually occurred or not. If not, what were the constraints in producing an effective integration process. Summary of Findings; A) Program effects and impact 1. Effects on FP use: During this 2 year action period, FP acceptance increased from 58% in 1981 to 78% in 1984 in both the study and control areas. This increase in both areas was mainly due to the new family planning campaign driven by the Government for the same study period. Therefore, there was no increment of FP acceptance rate due to additional input of MW to the on-going FP program. But in the study area, quality aspects of FP were somewhat improved, having a better continuation rate of IUDs & pills and more use of effective Contraceptive methods in comparison with the control area. 2. Effects of use of MCH services: Between the study and control areas, however, there was a significant difference in maternal and child health care. For example, the coverage of prenatal care was increased from 53% for 1981 birth cohort to 75% for 1984 birth cohort in the study area. In the control area, the same increased from 41% (1981) to 65% (1984). It is noteworthy that almost two thirds of the recent birth cohort received prenatal care even in the control area, indicating that there is a growing demand of MCH care as the size of family norm becomes smaller 3. There has been a substantive increase in delivery care by medical professions in the study area, with an annual increase rate of 10% due to midwives input in the study areas. The project had about two times greater effect on postnatal care (68% vs. 33%) at delivery care(45.2% vs. 26.1%). 4. The study area had better reproductive efficiency (wanted pregancies with FP practice & healthy live births survived by one year old) than the control area, especially among women under 30 (14.1% vs. 9.6%). The proportion of women who preferred the 1st trimester for their first prenatal care rose significantly in the study area as compared to the control area (24% vs 13%). B) Effects on Interactive Linkage 1. This project made a contribution in making several useful steps in the direction of service integration, namely; i) The health workers have become familiar with procedures on how to work together with each other (especially with a midwife) in carrying out their work in FP/MCH and, ii) The health workers have gotten a feeling of the usefulness of family health records (statistical integration) in identifying targets in their own work and their usefulness in caring for family health. 2. On the other hand, because of a lack of required organizational factors, complete linkage was not obtained as the project intended. i) In regards to the government health worker's activities in terms of home visiting there was not much difference between the study & control areas though the MW did more home visiting than Government health workers. ii) In assessing the service performance of MW & health workers, the midwives balanced their workload between 40% FP, 40% MCH & 20% other activities (mainly immunization). However, $85{\sim}90%$ of the services provided by the health workers were other than FP/MCH, mainly for immunizations such as the encephalitis campaign. In the control area, a similar pattern was observed. Over 75% of their service was other than FP/MCH. Therefore, the pattern shows the health workers are a long way from becoming multipurpose workers even though the government is pushing in this direction. 3. Villagers were much more likely to visit the health sub-center clinic in the study area than in the control area (58% vs.31%) and for more combined care (45% vs.23%). C) Organization factors (admistrative integrative issues) 1. When MW (new workers with higher qualification) were introduced to HSC, it was noted that there were conflicts between the existing HSC workers (Nurse aids with less qualification than MW) and the MW for the beginning period of the project. The cause of the conflict was studied by an anthropologist and it was pointed out that these functional integration problems stemmed from the structural inadequacies of the health subcenter organization as indicated below; i) There is still no general consensus about the objectives and goals of the project between the project staff and the existing health workers. ii) There is no formal linkage between the responsibility of each member's job in the health sub-center. iii) There is still little chance for midwives to play a catalytic role or to establish communicative networks between workers in order to link various knowledge and skills to provide better FP/MCH services in the health sub-center. 2. Based on the above findings the project recommended to the County Chief (who has power to control the administrative staff and the technical staff in his county) the following ; i) In order to solve the conflicts between the individual roles and functions in performing health care activities, there must be goals agreed upon by both. ii) The health sub·center must function as an autonomous organization to undertake the integration health project. In order to do that, it is necessary to support administrative considerations, and to establish a communication system for supervision and to control of the health sub-centers. iii) The administrative organization, tentatively, must be organized to bind the health worker's midwive's and director's jobs by an organic relationship in order to achieve the integrative system under the leadership of health sub-center director. After submitting this observation report, there has been better understanding from frequent meetings & communication between HW/MW in FP/MCH work as the program developed. Lessons learned from the Seosan Project (on issues of FP/MCH integration in Korea); 1) A majority or about 80% of the couples are now practicing FP. As indicated by the study, there is a growing demand from clients for the health system to provide more MCH services than FP in order to maintain the achieved small size of family through FP practice. It is fortunate to see that the government is now formulating a MCH policy for the year 2,000 and revising MCH laws and regulations to emphasize more MCH care for achieving a small size family through family planning practice. 2) Goal consensus in FP/MCH shouBd be made among the health workers It administrators, especially to emphasize the need of care of 'wanted' child. But there is a long way to go to realize the 'real' integration of FP into MCH in Korea, unless there is a structural integration FP/MCH because a categorical FP is still first priority to reduce the rate of population growth for economic reasons but not yet for health/welfare reasons in practice. 3) There should be more financial allocation: (i) a midwife should be made available to help to promote the MCH program and coordinate services, (in) there should be a health sub·center director who can provide leadership training for managing the integrated program. There is a need for 'organizational support', if the decision of integration is made to obtain benefit from both FP & MCH. In other words, costs should be paid equally to both FP/MCH. The integration slogan itself, without the commitment of paying such costs, is powerless to advocate it. 4) Need of management training for middle level health personnel is more acute as the Government has already constructed 90 MCH centers attached to the County Health Center but without adequate manpower, facilities, and guidelines for integrating the work of both FP and MCH. 5) The local government still considers these MCH centers only as delivery centers to take care only of those visiting maternity cases. The MCH center should be a center for the managment of all pregnancies occurring in the community and the promotion of FP with a systematic and effective linkage of resources available in the county such as i.e. Village Health Worker, Community Health Practitioner, Health Sub-center Physicians & Health workers, Doctors and Midwives in MCH center, OBGY Specialists in clinics & hospitals as practiced by the Seosan project at primary health care level.