• The Korean Journal of Financial Management
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• v.22 no.2
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• pp.213-226
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• 2005

Adverse selection is a heavily scrutinized subject within the financial intermediary industry. Consensus is reached regarding its effect on the loan interest rate. Despite the similar features of financial service offered by the credit card, we still have controversy regarding credit card interest rate on how is adverse selection incurred with the change of interest rate. Thus, this paper explores how does the adverse selection, if ever, take place and affect the credit card interest rate. Information asymmetry regarding the credit card users' type represented by the default probability is assumed. The users are assumed to be rational in that they want to minimize the per unit dollar expense associated with the commercial transaction and financing between the two typical payment methods, cash and credit card. Suppliers, i.e. credit card companies, would like to maximize their profit and would be better off with more pervasive use of credit cards over the cash. Then we could show that the increasing credit card interest rate is subject to the adverse selection, sharing the same tenet with that of the bank loan interest rate proposed by Stiglitz and Weiss. Hence the current theory predicts that credit card market also suffers from adverse selection with increasing interest rate.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.15 no.6
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• pp.3564-3570
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• 2014

This study assessed the validity of establishing and implementing a financial supervisory policy considering that Mutual finance's increase in deposits received raises the rate of loans in the process that the recent financial supervisory authorities applied various regulatory measures to mutual financial organizations. As a result of the analysis with a least squares regression model for the correlation between the rate of increase in the deposits received by Nonghyup Mutual Finance and the default rate of loans through the complete enumeration on the 1,161 the regional Nonghyup branches nationwide from 2005 to 2011, showed that there was no (+) correlation between them the financial supervisory authorities premised but a (-) relation. As Nonghyup is a mutual financial organization with the phenomenon that the application plan of increased deposits received is becoming diversified, the increase in deposits received helps reduce the procurement interest rate of funds, which provides a chance to apply the low interest of loans again, so they have positive effects on the overall loans. Financial Supervisory authorities should re-establish a direction of policy understanding the characteristics of Nonghyup's fund use and the detailed correlation between the rate of increase in deposits received and the default rate.

• East Asian Journal of Business Economics (EAJBE)
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• v.2 no.4
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• pp.26-47
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• 2014

The paper examined effect of age cohort on life cycle financial planning. A total of 990 questionnaires were distributed with a 55.2% return rate. Seven hypotheses were analysed using hierarchical and ordinary regression analysis. The results revealed that age cohort variables made significant contribution to life cycle financial planning as well as personal orientation towards retirement planning, particularly the younger age cohort. Age cohorts do affect personal orientation towards retirement planning with the confidence level making a significant impact. Current financial resources do have a strong positive impact on consumption for all age cohorts. On the other hand, no significant effect was found between age cohorts and current financial resources but older age cohorts were relatively more significant predictors. The implication was that not only should their individual perceptions of financial planning become an increasingly important part of people's long-term commitment throughout their life-cycle, it must also assume the role as a self-directed life-long learning process, in view of the ever-changing and complicated financial environment.

• Health Policy and Management
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• v.26 no.3
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• pp.226-232
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• 2016

Background: This study was conducted to analyze the influence of socioeconomic characteristics of community on the food insecurity under the control of personal socioeconomic factors which may be influence to the food security. Methods: Food insecurity and individual socioeconomic characteristics were obtained from 2012 community health survey. Socioeconomic characteristics of communities were extracted from the data of Statistics Korea and local governments. Personal socioeconomic factors were sex, age, educational status, job, and monthly family income. Socioeconomic characteristics of communities were administrative district (urban vs. rural), senior population rate, degree of financial self reliance, degree of financial independence, portion of welfare budget, number of welfare facilities, and unemployment rate. We analysed the relationships between the food insecurity and socioeconomic characteristics of community using multi-level analysis under the control of personal characteristics. Results: On personal level age, sex, education status, and monthly family income were related with food insecurity. On community level administrative district (urban vs. rural), degree of financial independence, unemployment rate, and proportion of welfare budget among local general government accounts were related to individual food insecurity. Rural area, district with low levels of financial independence, low portion of welfare budget, and greater unemployment rate showed a higher level of food insecurity. Conclusion: To reduce the level of food insecurity in a community it is necessary to decrease the unemployment rate, in addition to providing support from the central government by increasing the proportion of the welfare budget so that both factors contribute to raising the degree of financial independence.

• East Asian Journal of Business Economics (EAJBE)
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• v.7 no.4
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• pp.41-49
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• 2019

Purpose - This paper empirically investigates what factors contribute to corporate investments under financial constraint condition in the Korean stock market. In the paper, tangible assets' growth rate and fixed assets' growth rate were employed as investment performance and total assets were also used for comparison purpose. Research design and methodology - Samples are constructed by manufacturing firms listed on the stock market of Korea as well as those who settle accounts in December from 2001 to 2018. Financial institutions are excluded from the sample as their accounting procedures, governance and regulations differ. This study adopted a fixed panel regression model to assess the sample construction including yearly and cross-sectional data. Results - This results support the literatures that major shareholders showed positive significance to investment in financially unconstrained firms and no significance to investment in financially constrained firms. ROA showed positive significance to investment in financially unconstrained and constrained firms, whereas firm size showed negative significance to investment in financially unconstrained and constrained firms. Debt showed no positive significance to investment in financially unconstrained firms and negative significance to investment in financially constrained firms. Conclusions - This paper documented evidence that ROA and firm size are important factors to investment irrespective of firms' financial constraints. And this paper also supports that major shareholders give positive impact to investments in financially unconstrained firms. This means that financial constraints itself rule corporate' investment decision in financially constrained firms.

• Journal of the Korean housing association
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• v.25 no.3
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• pp.53-62
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• 2014

This paper investigates whether the use of Rainwater Harvesting Systems (RWHSs) to provide water for washing machines in Hong Kong residential buildings would be financially attractive. In such systems, rainwater is accumulated and reused for doing laundry, garden irrigation, flushing toilets, and even drinking. Thus, the analysis of RWHSs' financial feasibility is essential for construction projects. RainCycle is used to validate financial feasibility, considering particular circumstances and data relevant to the Hong Kong context. A range of different scenarios by adjusting three factors are evaluated: catchment area, water demand, and discount rate. It is suggested that $2,000m^2$ would be a suitable catchment area in a typical Hong Kong residential building and it is demonstrated how water demand and discount rate influence the financial performance of RWHSs. In particular, the financial performance of RWHSs is sensitive to discount rates. The results suggest that the RWH system would be worthwhile for buildings with a lower number of floors, but would barely achieve financial validation in Hong Kong's super high-rise residential buildings.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.7
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• pp.343-348
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• 2020

So far, research into multinational bank' overseas expansion has focused on foreign direct investment in the financial services industry. However, this study focused its existing theories on multinational banks on decision-making related to the type of overseas advancement of local financial institutions. For research, four environmental factors were considered: the scale of foreign direct investment, the scope of financial services that can be provided according to the rules of the host country, the corporate tax rate of the host country, and the level of development of the host country's banking industry. Through Kotra, data on the total amount of claims from 2010 to 2014 and the regulatory status for the country's financial industries were obtained. Hypothesis are built around theories and survey factors and has been demonstrated through regression analysis. Results show that Korean financial institutions tend to expand as legally independent subsidiaries where the corporate tax rate of the host country is relatively low. Contrary to the previous studies based on the U.S. banking corporates, results show that Korean banks tend to expand in forms of branches to the host countries with high level of banking system development.

• KDI Journal of Economic Policy
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• v.42 no.1
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• pp.31-56
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• 2020

Does financial development contribute to economic growth? The literature finds that an expansion in financial resources is useful for economic growth if the degree of financial development is under a certain threshold; otherwise, the expansion is detrimental to growth. Almost every published study, however, considers country-panel data. Accordingly, the results are not directly applicable to the Korean economy. By examining Korean time-series data, this paper finds that there is an inverse U-shaped relationship between the per capita real GDP growth rate and private credit (as a percentage of nominal GDP)-a well-known measure of quantitative financial development, where the threshold is 171.5%. This paper also finds that private credit is positively associated with economic growth if the share of household credit out of private credit is less than 46.9%; otherwise, private credit is negatively associated with economic growth. As of 2016, the ratio of private credit to GDP and the ratio of household credit to private credit are both higher than the corresponding thresholds, which implies that policymakers should place more emphasis on qualitative financial development than on a quantitative expansion of financial resources.

• Journal of the Korean Home Economics Association
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• v.41 no.1
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• pp.39-58
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• 2003

This study investigated the effects of the householder's age as a proxy for the family life cycle stage variable and the householder's occupation on the household financial structures. Household financial structures are analyzed by the components of two financial statements(the income and expense statement and the balance sheet statement) and selected financial ratios. The data came from the 1998 Korean Household Panel Study. It was found that the age profiles of household finances such as household income, expenditure, savings and consumption rate, financial assets, real assets and home ownership, debt and net worth usually vary according the householder's occupation. The ratios of debt repayment and the liquidity ratios also vary in part as age changes for each occupational group.

• Journal of Korea Foundry Society
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• v.42 no.2
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• pp.83-93
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• 2022

Throughout this research course, we have analyzed the financial situation of more than 2,700 companies using credit evaluation disclosures from 2017 to 2019. The population was gathered based on the certification of Ppuri companies and Ppuri Expertise companies through the Korea National Ppuri Industry Center, accompanied by the NICE credit evaluation index. For the first time in Korea, we wanted to look at growth, profitability, and stability through financial analysis of the Ppuri industry. Through an indepth analysis, we identified operating income (rate), net income (rate), asset size, and debt ratio, along with three years of Ppuri company workers and total sales fluctuations, and looked at the financial structure per capita. In addition, financial status per person was compared by dividing Ppuri companies into six groups by employee size. Groups were 10 or fewer people, 11 to 20 people, 21 to 50 people, 51 to 200 people, 201-300 people, and 300 or more people; single individual companies were excluded for research convenience. Overall, the financial situation of Ppuri companies was judged to be in a very bad downturn, and financial indicators deteriorated over the course of the three years of investigation. In particular, the smaller the number of employees, the greater the financial fluctuations were and the worse the situations were. Among Ppuri companies, the casting industry, which is the technical starting point for the value chain of the industry, was found to also be in a very bad state, with continued workforce declines, total assets and sales reductions at severe levels, and operating income (rate) and net income (rate) also very poor. This is why we need a suitable and feasible policy direction, something that is difficult but must be allowed to develop.