• 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.

• Journal of Global Scholars of Marketing Science
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• v.19 no.1
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• pp.23-35
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• 2009

A hypermarket as the one of the most globally standardized retailing format is also the type of store among various types of stores that the most active in expanding into other foreign markets. Recently, as several Korean retailing companies start to penetrate into Chinese market they differentiate themselves with modern facilities and customers service oriented high-end concept. China and Korea as Far East Asian countries share many common values, however precise and careful analysis should be carried out since there may also be critical differences in socio-economic aspects as well as in consumption patterns due to the level of development stages of retail industry among two countries. Even though precise and careful study is crucial on Chinese retailing market and consumers, none of researches and studies on 'how the quality of service dimensional structure is different between Korea and China', and 'what will be the most important and influential service dimensional factors for Chinese consuers compared to the hypermarkets customers in Korea' in order to improve the level of Chinese consumers satisfaction' have been fulfilled At this point of view, this study uses KD-SQS (Rho Eun Jung & Sir Yong Gu, 2008) which is a measure of Korean hypermarkets service quality to set up a hypothesis on Korean and Chinese consumers, and an empirical analysis is conducted. We try to get the answers about how the comparative importance of Service quality dimensions which decides the level of customer satisfaction is different depending on the cultural dimensions and socio-economic factors among two countries, Korea and China. Based upon the results, we try to give a valuable suggestion of what service dimensional factors should be reinforced to improve the level of CS in Chinese retailing market. Hypotheses for this study are as follows : H1. Each dimension of Service Quality significantly affects the level of CS H2. The effect of 'Basic Benefit' in service quality dimensions on the level of CS is greater in China than in Korea H3. The effect of 'Promotion' in service quality dimensions on the level of CS is greater in China than in Korea H4. The effect of 'Physical Aspects'in service quality dimensions on the level of CS is greater in Korea than in China. H5. The effect of 'Personal Interaction' in service quality dimensions on the level of CS is greater in China than in Korea H6. The effect of 'Policy' in service quality dimensions on the level of CS will be greater in Korean than in China H7. The effect of additional convenience in service quality dimensions on the level of CS will be greater in Korean than in China. More than 1,100 data were collected directly from the surveys of Chinese and Korean consumers in order to verify the hypotheses above. In Korea, stores which have floor space of over $9,000m^2$and opened later than year 2000 were selected for the samples, and thus Gayang, Wolgye, Sangbong, Eunpyeong, Suh-Suwon, Gojan stores and their customers were surveyed. In China, notable differences in the income levels and consumer behaviors between cities and regions were considered, and thus the research area was limited to the stores only in Shanghai. 6 stores which have the size of over $6,000m^2$ and opened later than 2000, such as Ruihong, Intu, Mudanjang, Sanrin, Raosimon, and Ranchao stores were selected for the survey. SPSS 12.0 and AMOS 7.0 were used as statistical tools, and exploratory factor analysis, confirmatory factor analysis, and multi-group analysis were conducted. In order to carry out a multi group analysis that decides whether the structure variables which shows the different effects of 6 service dimensions in Korean and Chinese groups is statistically valid, configural invariance, metric invariance, and structural invariance are tested in order. At the results of the tests, 3 out of 7 hypotheses were supported and other 4 hypotheses were denied. According to the study, 4 dimensions (Basic Benefit, Physical Environment, Policy, and additional convenience) were positively correlated with CS in Korea, and 3 dimensions (i.e. basic benefit, policy, additional convenience) were significant in China. However, the significance of the service-dimensions was turned out to be partially different in Korea and China. The Basic Benefit is more influential in deciding the level of CS in china than Korea, however Physical Aspect is more important factor in Korea. 'Policy dimension' did not make significant difference between two countries. In the 'additional convenience dimension', the differences in 'socio-economic factors' than in'cultural background' were considered as more important in Chinese consumers than Korean. Overall, the improvement of Service quality will be crucial factors to increase the level of CS in Chinese market same as Korean market. In addition, more emphases need to be placed on the service qualities of 'Basic Benefit' and 'additional convenience' dimensions in China. In particular, 'low price' and 'product diversity' that constitute 'Basic Benefit' are proved to be comparatively disadvantageous and weak points of Korean companies compared to global players, and thus the prompt strengthening those dimensions would be urgent for Korean retailers. Moreover, additional conveniences such as various tenants and complex service and entertaining area will be more important in China than in Korea. Besides, Applying advanced Korean Hypermaret`s customer policy to Chinese consumers will help to get higher reliability and to differentiate themselves to other competitors. However, as personal interaction, physical aspect, promotions were proved as not significant for the level of CS in China, Korean companies need to reconsider the priority order of resource allocations when they tap into Chinese market.

• Korean Journal of Psychosomatic Medicine
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• v.8 no.2
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• pp.212-227
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• 2000

This study was designed to testify the reliability and validation on the Korean version of the Social Adaptation Self-rating Scale(SASS) which was developed from Bose et al. for the evaluation of social motivation and behavior of depressed patients in 1997. Interests for the social world, those of social functioning, of patients were involved in the addition of new measure of disturbance. And those were distinct from abnormalities of thought, mood and symptoms of patients with major depression. As the previous reports there were several evidences that treatments may be less likely to be effective if the system they act on is dysfunctional. Thus, a better social situation favoured better outcome. As a matter of fact, however, those reports were developed in the course of the evaluation of interpersonal therapy(IPT) and cognitive therapy. Accordingly the conversed question -whether pharmacological therapy with antidepressants can impact on social functioning in addition to addressing the core features of illness- has been addressed. To date, anyhow, it is accepted that enhancement of social functioning may be a therapeutic principle in its own right and illness rarely divorced from social context. In terms of those concepts the introduction of an assessment of social functioning into pharmacotherapeutic studies of depression has been welcomed and might be a potent instrument for evaluating the relative pharmacoeconomic benefits of different treatments. Despite of many scales which were applied for the evaluation of symptoms in the patients with depression, however, the scale for the evaluation of social functiong has not been introduced in Korea yet. Thus, this study was designed to introduce the concepts of social functioning in the patients with depression and to testify the reliability and validation on Korean version of SASS. This Korean version of SASS was submitted to a reliability and validation procedure based on the data from healthy general population survey in 291 individuals and 40 patients with major depression. Cronbach a was 0.790 in total subjects group and the correlation of test-retest was statistically significant(y=0.653, p<0.0l). Thus, the Korean version of SASS might be shown to be valid and reliable. The results of multivariate analyses allowed the identification of 3 principle factors(factor 1 = intersts in social activities, factor 2 = active interpersonal relationship, factor 3 = selfesteem) in normal group, however, it could be counted as only one factor in the depression group because nearly total items of SASS were involved in factor 1. In the view of these results, the Korean version of SASS may be useful additional tool for the evaluation of social functioning in depression.

• Journal of Intelligence and Information Systems
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• v.24 no.2
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• pp.85-109
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• 2018

Recommender system recommends the items expected to be purchased by a customer in the future according to his or her previous purchase behaviors. It has been served as a tool for realizing one-to-one personalization for an e-commerce service company. Traditional recommender systems, especially the recommender systems based on collaborative filtering (CF), which is the most popular recommendation algorithm in both academy and industry, are designed to generate the items list for recommendation by using 'overall rating' - a single criterion. However, it has critical limitations in understanding the customers' preferences in detail. Recently, to mitigate these limitations, some leading e-commerce companies have begun to get feedback from their customers in a form of 'multicritera ratings'. Multicriteria ratings enable the companies to understand their customers' preferences from the multidimensional viewpoints. Moreover, it is easy to handle and analyze the multidimensional ratings because they are quantitative. But, the recommendation using multicritera ratings also has limitation that it may omit detail information on a user's preference because it only considers three-to-five predetermined criteria in most cases. Under this background, this study proposes a novel hybrid recommendation system, which selectively uses the results from 'traditional CF' and 'CF using multicriteria ratings'. Our proposed system is based on the premise that some people have holistic preference scheme, whereas others have composite preference scheme. Thus, our system is designed to use traditional CF using overall rating for the users with holistic preference, and to use CF using multicriteria ratings for the users with composite preference. To validate the usefulness of the proposed system, we applied it to a real-world dataset regarding the recommendation for POI (point-of-interests). Providing personalized POI recommendation is getting more attentions as the popularity of the location-based services such as Yelp and Foursquare increases. The dataset was collected from university students via a Web-based online survey system. Using the survey system, we collected the overall ratings as well as the ratings for each criterion for 48 POIs that are located near K university in Seoul, South Korea. The criteria include 'food or taste', 'price' and 'service or mood'. As a result, we obtain 2,878 valid ratings from 112 users. Among 48 items, 38 items (80%) are used as training dataset, and the remaining 10 items (20%) are used as validation dataset. To examine the effectiveness of the proposed system (i.e. hybrid selective model), we compared its performance to the performances of two comparison models - the traditional CF and the CF with multicriteria ratings. The performances of recommender systems were evaluated by using two metrics - average MAE(mean absolute error) and precision-in-top-N. Precision-in-top-N represents the percentage of truly high overall ratings among those that the model predicted would be the N most relevant items for each user. The experimental system was developed using Microsoft Visual Basic for Applications (VBA). The experimental results showed that our proposed system (avg. MAE = 0.584) outperformed traditional CF (avg. MAE = 0.591) as well as multicriteria CF (avg. AVE = 0.608). We also found that multicriteria CF showed worse performance compared to traditional CF in our data set, which is contradictory to the results in the most previous studies. This result supports the premise of our study that people have two different types of preference schemes - holistic and composite. Besides MAE, the proposed system outperformed all the comparison models in precision-in-top-3, precision-in-top-5, and precision-in-top-7. The results from the paired samples t-test presented that our proposed system outperformed traditional CF with 10% statistical significance level, and multicriteria CF with 1% statistical significance level from the perspective of average MAE. The proposed system sheds light on how to understand and utilize user's preference schemes in recommender systems domain.

• Korean Journal of Heritage: History & Science
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• v.42 no.1
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• pp.88-99
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• 2009

This study was conducted to formulate management guidelines for Natural monumental old trees in Korea through survey of tree vigor and analysis of growing environments. A total of 20 old trees designated as natural monuments in Seoul, Incheon, and Gyeonggi Province were surveyed. The biological characteristics were surveyed with 4 items of species, ages and height of trees. The surrounding environments were surveyed with 2 items of location types and surroundings. The root conditions were surveyed with 2 items of denudation and molding depth. The health conditions were surveyed with 5 items of withering rate, cavity size, bark breakaway rate, damages by blight and insects, and growing tips. The soil conditions were surveyed with 6 items of PH, organic contents, valid phosphoric acid, transposal cations(K, Ca) and soil compaction. On the basis of outcomes of these research items, mutual relations among locations, growings and soil conditions of old trees were analyzed by carring out cross tabulation, correlation, and simple and multiple regression. Management guidelines were presented searching the factors effecting on the health of the monumental old trees. On the biological characteristics, the old trees designated as natural monuments were Pinus bungeana(4 trees), Juniperus chinensis(3 trees), Ginkgo biloba(3 trees), Poncirus trifoliata(2 trees). Actinidia arguta, Wisteria floribunda, Thuja orientalis, Quercus mongolica, Sophora japonica, Fraxinus rhynchophylla, Zelkova serrata, and Pinus densiflora. The tree height ranged from 4.2 to 39.2m, and root collar rounds ranged from 1.01 to 15.2m. On the surrounding environments, The location types ; Gardens(4), historical sites(5), residental sections(3) open agricultural fields(3), mountain hills(3), and near ocean beaches(1) and stream site(1). The surroundings ; 75% denudation of roots, molded more than 10cm except 4 trees(25%). On the health conditions, 1)Withering rate ; Ginkgo biloba(20%) in Yongmoon temple, (5%) in Saki-ri, kanwha-gun, and others had no withering rate. 2) Cavity size ; all subject had $5{\sim}100cm^3$ of cavity. 3) Bark breakaway rate ; Pinus bungeana in Soosong-dong, in the shrine of Confucius, in Samchung-dong, especially high rate of cavity(5~50%) in Seoul area and in Saki-ri, Kangwha-gun were high 45% brakeaway rate. 4) Damages by blight and insects was slight due to managements. 5Growing tips ; In cases of Juniperus chinensis in Changdeok palace and SunnogDang, seoul, growing tips were 1/2, presumably cause by air pollution, and in cases of Fraxinus rhynchophylla in Paju city and Pinus densiflora in BacksaDorip-ri, Icheon city, growing tips were fine, presumably because there were no moldings. On the Soil conditions, Soil pH ranged from 5.2 to 8.3, organic matter contents from 12% to 56%, phosphorus contents from 104 to 618ppm, soil compaction ranged from 7 to 28mm( among them, Denudation was severe with 21~28mm soil compactions in cases of Pinus bungeana in Soosong -dong, Thuja orientalis in Samchung -dong, Ginkgo biloba in the shrine of Confucius and in Yongmoon temple.) Results of cross tabulation, correlation, and regression analysis showed that molding depth was the most serious factor to deteriorate the tree vigor and cambium conductivity. In addition, soil acidity, organic matter contents, disease and insect damages and cambial detachment were also related to the tree vigor. Additional research of these relationships will be needed to conduct more detailed studies. Based on the relationships between the tree vigor and growing environments, it is considered that old trees should be managed to give them more growing spaces and less abuses. Also, molded soils should be removed and further soil-molding around the tree collar should be prohibited. For the construction of systematic management and removal of harmful factors, appropriative management according to spices, persistent monitering of damaged cases and construction of management system through the accumulation of data on the relationships of soil conditions are required.