• KDI Journal of Economic Policy
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• v.13 no.1
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• pp.3-33
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• 1991

Since the early 1980's, the Korean government has gradually been widening the Korean market to foreign consumer goods. This, combined with the increased purchasing power of the Korean consumers resulting from the continued economic growth of the country, has sparked a spectacular influx of foreign consumer goods into Korea, ranging from BMW's to chopsticks. Import of foreign consumer goods amounted to more than 6 billion dollars in 1989 and is continuing to grow at a rapid rate. The increased import of foreign consumer goods doubtlessly improved the overall welfare of the Korean consumers by providing them with a wider range of options to choose from, by lowering the prices of some of the consumer goods domestically produced, and also by forcing the producers of some Korean goods to face competition with better foreign goods, thus giving them an incentive to raise the quality of their products. However, it is agreed by most economists that this increase in general welfare has been much smaller than what they had expected at the outset. Consumer prices of most imported consumer goods are easily double the import price, and in some cases, more than treble the import prices. Further, there has not been a noticeable drop in the prices of domestically produced consumer goods. Much of the blame has been attributed to the distribution sector of Korea. The objective of this paper is to analyze the imported consumer goods distribution sector of Korea, focusing on the possible sources of the poor performance of that sector, and to make policy suggestions that could potentially increase the welfare. This paper differs from all the previous research by others on this subject in that it analyzes the imported consumer goods distribution sector of Korea as a vertical structure. The distribution sector of an imported consumer good is a vertical structure since it consists of an international market, an import stage, and domestic wholesale and retail markets, in that order vertically. Our study naturally includes the analysis of the vertical restraints as well as the analysis of the industrial organization of each horizontal stage in the vertical structure. Each horizontal component of the imported consumer goods distribution sector is basically a monopolistically competitive market differentiated by characteristics of goods and by the locations and the services of firms. Further, restrictive dealership and resale price maintenance are found to be widely in use. Our main findings are the follwing; First, most consumer goods are imported monopolistically or oligopolistically through restrictive dealership contracts between foreign producers and domestic importers. Such restrictive dealership gives importers market power in the domestic market and explains many of the large discrepancies betwen the consumer prices and the import prices of many goods. Korean anti - trust law does not cover the issues arising from the market power of an importer resulting from a restrictive dealership contract. Second, some major producers of Korean goods are also importers of foreign goods that are substitutes of their products. The import of substitutes by major domestic producers is anti - competitive because it tends to raise the prices of both domestic goods and foreign goods, and also because it reduces the incentive of the domestic producers to raise the quality of their products. Third, wholesalers and retailers widely use resale price maintenance as a price fixing mechanism, and while this is against the anti- trust law, it seldom gets noticed. Fourth, the high level of rents of real estate for commercial use works as an entry barrier to the distribution sector and results in reduced competition by the firms in that sector. Finally, there are information problems. Consumers have inferior information to firms about the quality of a foreign consumer good that they have not tried before. Such information asymmetry often enables firms to raise prices. In addition, information asymmetry between importers frequently delays the import of cheaper substitutes. In order to alleviate the problems indentified above, we suggest the following policy changes. The government should strengthen the anti - trust law and its enforcement to regulate restrictive import contracts, import of competing goods by major domestic producers, and RPM by wholesalers and retailers that is aimed at price fixing. In addition, the government should loosen its tight real estate policy to encourage investment in the distribution sector. Finally, we suggest that the import price revelation policy that has been in use for some items since 1990 be expanded to most imported consumer goods that are introduced for the first time to give consumer better information and be used only for the period of time needed to inform sufficient number of consumers.

• The Journal of Small Business Innovation
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• v.19 no.4
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• pp.19-39
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• 2016

With increasing adoption of smart products and complexity, companies have shifted their strategies from stand alone and competitive strategies to business ecosystem oriented and cooperative strategies. The win-win growth of business refers to corporate efforts undertaken by companies to pursue the healthiness of business between conglomerates and partnering companies such as suppliers for mutual prosperity and a long-term corporate soundness based on their business ecosystem and cooperative strategies. This study is designed to validate a theoretical proposition that the win-win growth strategy of Samsung Electronics and cooperative efforts among companies can create a healthy business ecosystem, based on results of case studies and surveys. In this study, a level of global market access of small and mid-sized companies is adopted as the key achievement index. The foreign market entry is considered as one of vulnerabilities in the ecosystem of small and mid-sized enterprises (SMEs). For SMEs, the global market access based on the research and development (R&D) has become the critical component in the process of transforming them into global small giants. The results of case studies and surveys are analyzed mainly based on a model of a virtuous cycle of Creativity, Opportunity, Productivity, and Proactivity (the COPP model) that features the characteristics of the healthiness of a business ecosystem. In the COPP model, a virtuous circle of profits made by the first three factors and Proactivity, which is the manifestation of entrepreneurship that proactively invests and reacts to the changing business environment of the future, enhances the healthiness of a given business ecosystem. With the application of the COPP model, this study finds major achievements of the win-win growth of Samsung Electronics as follows. First, Opportunity plays a role as a parameter in the relations of Creativity, Productivity, and creating profits. Namely, as companies export more (with more Opportunity), they are more likely to link their R&D efforts to Productivity and profitability. However, companies that do not export tend to fail to link their R&D investment to profitability. Second, this study finds that companies with huge investment on R&D for the future, which is the result of Proactivity, tend to hold a large number of patents (Creativity). And companies with significant numbers of patents tend to be large exporters as well (Opportunity), and companies with a large amount of exports tend to record high profitability (Productivity and profitability), and thus forms the virtuous cycle of the COPP model. In addition, to access global markets for sustainable growth, SMEs need to build and strengthen their competitiveness. This study concludes that companies with a high level of proactivity to invest for the future can create a virtuous circle of Creativity, Opportunity, Productivity, and Proactivity, thereby providing a strategic implication that SMEs should invest time and resources in forming such a virtuous cycle which is a sure way for the SMEs to grow into global small giants.

• Journal of the Korean Society of Environmental Restoration Technology
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• v.3 no.3
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• pp.45-76
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• 2000

The purposes of this study were to investigate and understand the present status of various types of "deserts", such as sand desert, gravel desert, rock desert, earth desert, salt desert, desert, rocky desert, gobi desert, sandy desert, clay desert, etc., and the general countermeasures for the combating "desertification" "desertization", and to develop the technologies on the revegetation and restoration for the combating desertification in China. The methods of this study were mainly composed of field surveys on the several experimental sites and research institutes related to combating desertification in China, and examinations on the various technologies for the combating desertification at the Daxing Experimental Station of Beijing Forestry University. The conclusion from this study may be summarized as follows; 1. Status and tendency of desertification in China : China is one of the countries seriously threatened by desertification. Desertification affected areas in China are mainly distributed in arid, semi-arid and dry sub-humid areas in China, covering the most regions of the Northeast China (eastern region of Inner-Mongolia), the northern part of the North China (middle and western region of Inner-Mongolia, Shaanxi, Ningsha, Gansu) and the western part of the Northwest China (Xinzang, Qinghai, Xizang). The total area affected by desertification in China is approximately 2.622 million $km^2$. It covers 27.3% of the total territory of China. Until recently, it is estimated that the annual spreading ratio of desertification in China is 2,460 $km^2$. Therefore, desertification is mostly serious problems facing to the Chinese people. 2. The causes and environmental effect of desertification : The desertification in China is mainly caused by compound factors, including natural condition and human activities. In China, the desertification is started by the decrease of precipitation, continuous dry and drought, strong wind, wind and water erosion, land degradation and loss of natural vegetation caused by climate variation, and accelerated by the human activities, such as over-cultivating, over-grazing, over-cutting of woods, irrational use of water resources. Because desertification has affected the geographical features, soil nutrients contents, salinity, vegetation coverage and the functions of ecosystem, the environmental deteriorations in the desertification affected areas are very seriously. 3. The fundamental strategies of combating desertification in China are the increase of education and awareness of people through various mass media, the revision of laws to guarantee operation of Desertification Combating Law and to improve many relating laws and regulations, the application of advanced technologies and training of experts, the establishment of discriminative policies, and increasing arrangement of budget-investment, and so on. China, as a signed country in UNCCD, has made efforts for the combating desertification. Korea is also signed country in UNCCD, so we should play an important role in the desertification combating projects of China for the northest asia and global environmental conservation as well as environmental conservation of Korea.

• Magazine of the Korean Society of Agricultural Engineers
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• v.15 no.4
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• pp.3170-3180
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• 1973

This study of the subject will review past and present irrigation development in Korea. Particular attention will be given to water pricing structure and a case study on the purpose of rational operation and management of irrigation water and organizations, and the optimum irrigation water and organizations, and the optimum irrigation water fee inorder to reduce farmers burden and to rationalize the farmland associations management so as to achieve development of the rural environment. In 1971, the reservoir of the Farmland Improvement A sociation (FIA) produced only 775 millison $m^3$ of irrigation water or 77% of planned capacity of 1,015 million $m^3$. It was caused by inefficient maintenance of irrigation facilities; for instance, about 21% of reservoirs, pumping stations and weirs in Korea have been silted by soil erosion which hinder to water production according to an ADC survey. The first Irritation Association was established in 1906, whcih was renamed the Farmland Assoeiation by the Rural Development Enouragement Law in 1970. By the end of 1971, 411,000 ha of rice paddies were under the control of 267 associations nationwide. The average water price assessed by Associations nationwide rose from 790 won per 0.1 ha. in 1966 to 1,886 won in 1971. The annual growth rate was 20%. The highest water price in 1971 was 4,773 won her 0.1 ha. and the lowest was 437 won. This range was caused by differences in debt burden, geographic conditions and management efficiency among the Associations. In 1971, the number of Associations which exceeded the average water price of 1,886 won per 0.1 ha. was 144, or 55.1% of all Association. In determination of water price, there are two principles; one is determined by production cost such as installation cost of irrigation facilities, maintenance cost, management cost and depreciation ect. For instance, the Yong San River Development project was required 33.7 billion won for total construction and maintenance cost is 3.1 billion won for repayment, maintenance and management cost per year. The project produces 590 million $m^3$ of irrigation water annually. Accordingly, the water price per $m^3$ is 5.25 won. The other principle is determined by water value in the crop products and in compared with production of irrigated paddy and non-irrigated paddy. By using this method, water value in compared with paddy rice vs. upland rice(Average of 1967-1971) was 14.15 won per $m^3$ and irrigated paddy vs. non-irrigated paddy was 2.98 won per $m^3$. In contrast the irrigation fee in average association of 1967-1971 was 1.54 won per $m^3$. Accordingly, the current national average irrigation fee(water price) is resonable compared with its water value. In this study, it is found that the ceiling of water price in terms of water value is 2.98 won per $m^3$ or 2,530 won per 0.1 ha. However, in 1971 55% of the associations were above the average of nationwide irrigation fees. which shows the need for rationalization of the Association's management. In connection with rationalization of the Association's management, this study recommends the following matters. (1) Irrigation fee must be assessed according to the amount of water consumption taking intoaccount the farmer's ability. (2) Irrigation fee should be graded according to behefits and crop patterns. (3) Training personnel in the operation and procedures of water management to save O&M costs. (4) Insolvent farmland association should be integrated into larger, sound associations in the same GUN in order to reduce farmers' water cost. (5) The maintenance and repair of existing irrigation facilities is as important as expansion of facilities. (6) Establishment of a new Union of Farmland Association is required to promoted proper maintenance and to protect the huge investment in irrigation facilities by means of technical supervision and guidance.

• Journal of Legislation Research
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• no.53
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• pp.419-454
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• 2017

Faced with the internationalization of capital markets, Korea needs to protect its investors and markets by applying the relevant laws extraterritorially. The Financial Investment Services and Capital Markets Act ("Capital Markets Act") explicitly introduced a new provision recognizing the extraterritoriality of the Act. While Article 2 of the Capital Markets Act comprehensively provides for prescriptive extraterritorial jurisdiction, the enactment of extraterritoriality alone does not guarantee that the Act will apply to cross-border transactions effectively. The effective extraterritorial application of an act is inseparable from the adjudicative and enforcement jurisdiction of the act. Specifically, active investigations and detections by the public regulators might be the first step for enforcing the Capital Markets Act. Unlike domestic regulations, however, multinational enforcement actions outside a regulator's home country becomes more problematic because of various obstacles. This Article examines difficulties which domestic regulators may confront in enforcing the Capital Markets Act extraterritorially and makes several recommendations for more effective multinational enforcement as follows. First, the Korean regulators should continue to foster cooperation through the IOSCO and provide international markets with the information and tools necessary for successful regulation of cross-border transactions. Second, the principle of dual criminality should be applied in a modified form for the effective mutual legal assistance in criminal matters. Third, there should be a legal device for the domestic regulator to freeze foreign wrongdoer's assets located outside Korea to repatriate those assets for distribution to defrauded investors in Korea.

• Journal of Fisheries and Marine Sciences Education
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• v.3 no.2
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• pp.73-82
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• 1991

In recent years, the communication and the trade between the Republic of Korea(South Korea) and the Communist bloc has been activated. The simultaneous entrance of South Korea and North Korea to the United Nations will accelerate the political dialogue and also the trade which is indirectly carried out through a third country at present will be turned into direct way. Fisheries products are also treated as one of the important trade goods and there is a hopeful prospect that the amount of trade will be steeply increased in the near future. Furthermore, there is a great possibility of development up to the joint utilization of fishing grounds or the joint investment in fisheries projects. Concerning such points, since it is very much important to understand the present status of fisheries in North Korea, the author made a study on this field as requested by the Board of Unification, and report a part of the study here. The prominent character of North Korea's ruling sea area is that the sea is completely separated into two regions-the East Sea Region and the West Sea Region-and no continuity exists between them. The East Sea Region locates in the fringe of the biggest fishing ground of the world-the North Pacific Ocean-and very rich in resources not only warm water fishes but also cold water fishes. Especially alaska pollack, Theragra chalcogramma, is caught abundantly in this region. Contrary to that, fishing activity in the West Sea Region seems to be interrupted in winter. Even though some valuable warm water fishes-yellow corvenia, Pseudosciaena manchurica, and hair tail, Trichiurus lepturus, and so forth-come to this region from spring to summer along the coast line of this region for spawning, and vigorous fishing activity is carried out. But the most of them migrate southward to the neighboring waters of Cheju Island for wintering from autumn to winter, and so the fishing activity in this region seems to be interrupted greatly during winter. The total number of fishing boats in North Korea is estimated at 36 thousand and the rate of mechnization at about 70% compared with 99 thousand and 78% in South Korea. North Korea proclaimed an exclusive economic zone of 200 nautical miles in 1977. Specific character of this zone is setting of military boundary zone, up to 50 miles from the base line in the East Sea Region and also it covers whole region of the economic zone in the West Sea Region. Especially in the East Sea Region she set up a straight base line which can not be permissible by the international law. North Korea's statistics on fisheries product has not been announced officially on account of her unique isolationism, but it can be estimated through several data procured. At the first, the amount of fisheries products in the North Korea is reported as about 1.7 million ${\frac{M}{T}}$ by Fisheries Statistics which issued by the FAO in 1987, but a North Korea's trade organization announced the amount as 3.5 million ${\frac{M}{T}}$ in 1988. The former seems to be underestimated and the latter must be an exaggeration. According to Chikuni, who is a Japanese worker for FAO, prepared the unofficial statistics based on the evidence which he collected through the fineries development plan of the FAO/UNDP, and estimated the mean amount between 1982 and 1984 was 2.4 million ${\frac{M}{T}}$ or so. The Board of Unification estimated on the basis of various factors that the amount was 2.2 million ${\frac{M}{T}}$ or so in 1987 and in 1988. This seems to be the most reasonable. To solve the chronic lack of foreign currency, North Korea makes effort on the development of fisheries, and has even aimed fisheries product at 11 million ${\frac{M}{T}}$ by 1993, but this target looks unrealistic under the present circumstances. Somehow, we can exploit her extreme policy which has gone so far as to establish such an excessive and impractical target. Nevertheless this will be helpful to promote the joint development of the fishery activity between South Korea and North Korea.

• The Korean Journal of Air & Space Law and Policy
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• v.18
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• pp.135-183
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• 2003

Aerospace force is a determining factor in a modem war. The combat field is expanding to space. Thus, the legitimacy of establishing aerospace force is no longer an debating issue, but "how should we establish aerospace force" has become an issue to the military. The standard limiting on the military use of space should be non-aggressive use as asserted by the U.S., rather than non-military use as asserted by the former Soviet Union. The former Soviet Union's argument is not even strongly supported by the current Russia government, and realistically is hard to be applied. Thus, the multi-purpose satellite used for military surveillance or a commercial satellite employed for military communication are allowed under the U.S. principle of peaceful use of space. In this regard, Air Force may be free to develop a military surveillance satellite and a communication satellite with civilian research institute. Although MTCR, entered into with the U.S., restricts the development of space-launching vehicle for the export purpose, the development of space-launching vehicle by the Korea Air Force or Korea Aerospace Research Institute is beyond the scope of application of MTCR, and Air Force may just operate a satellite in the orbit for the military purpose. The primary task for multi-purpose satellite is a remote sensing; SAR sensor with high resolution is mainly employed for military use. Therefore, a system that enables Air Force, the Korea Aerospace Research Institute, and Agency for Defense Development to conduct joint-research and development should be instituted. U.S. Air Force has dismantled its own space-launching vehicle step by step, and, instead, has increased using private space launching vehicle. In addition, Military communication has been operated separately from civil communication services or broadcasting services due to the special circumstances unique to the military setting. However, joint-operation of communication facility by the military and civil users is preferred because this reduces financial burden resulting from separate operation of military satellite. During the Gulf War, U.S. armed forces employed commercial satellites for its military communication. Korea's participation in space technology research is a little bit behind in time, considering its economic scale. In terms of budget, Korea is to spend 5 trillion won for 15 years for the space activities. However, Japan has 2 trillion won annul budget for the same activities. Because the development of space industry during initial fostering period does not apply to profit-making business, government supports are inevitable. All space development programs of other foreign countries are entirely supported by each government, and, only recently, private industry started participating in limited area such as a communication satellite and broadcasting satellite, Particularly, Korea's space industry is in an infant stage, which largely demands government supports. Government support should be in the form of investment or financial contribution, rather than in the form of loan or borrowing. Compared to other advanced countries in space industry, Korea needs more budget and professional research staff. Naturally, for the efficient and systemic space development and for the prevention of overlapping and distraction of power, it is necessary to enact space-related statutes, which would provide dear vision for the Korea space development. Furthermore, the fact that a variety of departments are running their own space development program requires a centralized and single space-industry development system. Prior to discussing how to coordinate or integrate space programs between Agency for Defense Development and the Korea Aerospace Research Institute, it is a prerequisite to establish, namely, "Space Operations Center"in the Air Force, which would determine policy and strategy in operating space forces. For the establishment of "Space Operations Center," policy determinations by the Ministry of National Defense and the Joint Chief of Staff are required. Especially, space surveillance system through using a military surveillance satellite and communication satellite, which would lay foundation for independent defense, shall be established with reference to Japan's space force plan. In order to resolve issues related to MTCR, Air Force would use space-launching vehicle of the Korea Aerospace Research Institute. Moreover, defense budge should be appropriated for using multi-purpose satellite and communication satellite. The Ministry of National Defense needs to appropriate 2.5 trillion won budget for space operations, which amounts to Japan's surveillance satellite operating budges.

• Journal of Distribution Science
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• v.10 no.2
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• pp.29-41
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• 2012

This paper undertakes a conceptual review of transaction cost to broaden the understanding of the transaction cost analysis (TCA) approach. More than 40 years have passed since Coase's fundamental insight that transaction, coordination, and contracting costs must be considered explicitly in explaining the extent of vertical integration. Coase (1937) forced economists to identify previously neglected constraints on the trading process to foster efficient intrafirm, rather than interfirm, transactions. The transaction cost approach to economic organization study regards transactions as the basic units of analysis and holds that understanding transaction cost economy is central to organizational study. The approach applies to determining efficient boundaries, as between firms and markets, and to internal transaction organization, including employment relations design. TCA, developed principally by Oliver Williamson (1975,1979,1981a) blends institutional economics, organizational theory, and contract law. Further progress in transaction costs research awaits the identification of critical dimensions in which transaction costs differ and an examination of the economizing properties of alternative institutional modes for organizing transactions. The crucial investment distinction is: To what degree are transaction-specific (non-marketable) expenses incurred? Unspecialized items pose few hazards, since buyers can turn toalternative sources, and suppliers can sell output intended for one order to other buyers. Non-marketability problems arise when specific parties' identities have important cost-bearing consequences. Transactions of this kind are labeled idiosyncratic. The summarized results of the review are as follows. First, firms' distribution decisions often prompt examination of the make-or-buy question: Should a marketing activity be performed within the organization by company employees or contracted to an external agent? Second, manufacturers introducing an industrial product to a foreign market face a difficult decision. Should the product be marketed primarily by captive agents (the company sales force and distribution division) or independent intermediaries (outside sales agents and distribution)? Third, the authors develop a theoretical extension to the basic transaction cost model by combining insights from various theories with the TCA approach. Fourth, other such extensions are likely required for the general model to be applied to different channel situations. It is naive to assume the basic model appliesacross markedly different channel contexts without modifications and extensions. Although this study contributes to scholastic research, it is limited by several factors. First, the theoretical perspective of TCA has attracted considerable recent interest in the area of marketing channels. The analysis aims to match the properties of efficient governance structures with the attributes of the transaction. Second, empirical evidence about TCA's basic propositions is sketchy. Apart from Anderson's (1985) study of the vertical integration of the selling function and John's (1984) study of opportunism by franchised dealers, virtually no marketing studies involving the constructs implicated in the analysis have been reported. We hope, therefore, that further research will clarify distinctions between the different aspects of specific assets. Another important line of future research is the integration of efficiency-oriented TCA with organizational approaches that emphasize specific assets' conceptual definition and industry structure. Finally, research of transaction costs, uncertainty, opportunism, and switching costs is critical to future study.

• Journal of Distribution Research
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• v.17 no.3
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• pp.1-24
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• 2012

Franchises have recently emerged as the most rapidly expanding industry positioned to create a large impact in the domestic economic. The Chinese franchise industry developed rapidly in the period prior and subsequent to WTO accession with more than 50% of new franchises brands emerging since 2000. M&A transactions in the Chinese franchise industry have progressed actively. In the period from 2005-2007, due to the wholesale and retail market opening in accordance with the guidelines laid forth within the MOU by the WTO the Chinese franchise market is now the largest market in the world all despite a short history of only 20 years. The amount of franchise market research on China is disproportional to its current size and development potential. Beginning in the 1990s, market research conducted by the International Franchise Association focused on emerging markets in Eastern Europe and China. While the research dealt with the Chinese investment environment, it insufficiently explained the market region and cultural environment. The purpose of this research is (i) to investigate the determinants of the performance of franchise systems in China and (ii) new contract renewals based on performance factors. This study will complement existing research in terms of the franchisee perspective. This study may also prove of the benefit to the franchise companies entering the Chinese franchise market enabling them to develop an effective strategy. This study shows that support, incentives, and system standardization by franchisor yielded a positive effect on management performance. This is consistent with previous studies by Shin (2000) and Kim (2008) targeting Korean franchises. Therefore, in the Chinese market, the franchisor must focus on support, incentives, and system standardization rather than concentrate only on the recruitment of franchisees in order to improve revenue. Hypotheses regarding franchisor control have been dismissed in existing research, in the opinion of this study, due to their complexity and inability to control the merchant as a one-kind-assessment-standard. Our findings show that the franchisees' financial condition, management ability and entrepreneurial spirit, among franchisee's characteristics, have a positive effect on franchisor's business performance and satisfaction for the franchisee. This is consistent with previous studies on headquarters' management performance of Lussier (1996), Heo and Jang (2008), and franchisees' financial condition, management ability and entrepreneurial spirit effect on franchisor's satisfaction of Weaven and Franzer (2007), Kim (2009), Han (2009), and Yoon etc. (2008). Therefore, when permitting a franchisee, financial condition, management ability, entrepreneurship of the franchisee should be carefully considered. Among relational factors between franchisor and franchisee, trust has the positive influence on the management performance of the franchisor while conflict has a negative effect. However, trust, commitment and conflict factors have been shown not to have any impact on the satisfaction of the franchise headquarters. This result is consistent with the previous studies of Pavlou and Ba (2000), Morrison (1999), Weaven and Frazer (2007), Kim and Park (1994), Sohn (2007) which show that trust between franchisor and the franchisees have a positive effect and that conflict has a negative impact on franchisor's management performance. Other factors causing a negative effective on the franchisor's management performance are a rapid environmental changes and uncertainty in the business. This is consistent with Campbell et al (2007), Kim and Kim (2009), Han and Baek (2008). Finally, the high management performance and satisfaction of the franchise headquarters has a positive effect on the intention of franchise renewal. In the case of large markets such as China, the franchisor's strategy and the role is very important. In this study, we also investigated the characteristics of franchisor and franchisee, relationship, and environmental uncertainty affecting on the management performance and satisfaction of franchisor. Recently, Korean franchises are attempting to enter foreign markets through the rise in popularity of Korean culture and entertainment commonly referred to as the Korean wave. This study provides recommendations for Korean franchises intending on entering the Chinese market. First, in order to achieve stable profits, the franchise corporation needs to support the operation of the individual franchisee through incentives and standardization of services. Second, because trust between the franchisor and franchisee has a positive effect on management performance, on-going discussion and cooperation is necessary to reduce the level of conflict.

• The Korean Journal of Air & Space Law and Policy
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• v.32 no.1
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• pp.83-138
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• 2017

Korea-China FTA entered into force on the 20th of December 2015, and one year elapsed after its effectuation as the FTA with China, our country's largest trading partner. Therefore, this study looks at the trends of air transport trade between Korea and China, and examines the contents of concessions to the air transport services sector in Korea-China FTA, and analyzes the impact on the air transport sector by Korea-China FTA, and proposes our country's aviation policy direction in order to respond to such impact. In 2016 the trends of air transport trade between Korea and China are as follows : The export amount of air transport trade to China was 40.03 billion dollars, down by 9.3% from the last year, and occupied 32.2% of the total export amount to China. The import amount of air transport trade from China was 24.26 billion dollars, down by 9.1% from the last year, and occupied 27.7% of the total import amount from China. The contents of concessions to the air transport services sector in Korea-China FTA are as follows : China made concessions to the aircraft repair and maintenance services and the computer reservation system services with limitations on market access and national treatment in the air transport services sector of the China Schedule of Specific Commitments of Korea-China FTA Chapter 8 Annex. Korea made concessions to the computer reservation system services, selling and marketing of air transport services, and aircraft repair and maintenance without limitations on market access and national treatment in the air transport services sector of the Korea Schedule of Specific Commitments of Korea-China FTA Chapter 8 Annex. The impact on the air transport sector by Korea-China FTA are as follows : As for the impact on the air passenger market, in 2016 the arrival passengers of the international flight from China were 9.96 million, up by 20.6% from the last year, and the departure passengers to China were 9.90 million, up by 34.8% from the last year. As for the impact on the air cargo market, in 2016 the exported goods volumes of air cargo to China were 105,220.2 tons, up by 6.6% from the last year, and imported goods volumes from China were 133,750.9 tons, up by 12.3% from the last year. Among the major items of exported air cargo to China, the exported goods volumes of benefited items in the Tariff Schedule of China of Korea-China FTA were increased, and among the major items of imported air cargo from China, the imported goods volumes of benefited items in the Tariff Schedule of Korea of Korea-China FTA were increased. As for the impact on the logistics market, in 2016 the handling performance of exported air cargo to China by domestic forwarders were 119,618 tons, down by 2.1% from the last year, and the handling performance of imported air cargo from China were 79,430 tons, down by 4.4% from the last year. In 2016 the e-commerce export amount to China were 109.16 million dollars, up by 27.7% from the last year, and the e-commerce import amount from China were 89.43 million dollars, up by 72% from the last year. The author proposes the aviation policy direction of Korea according to Korea-China FTA as follows : First, the open skies between Korea and China shall be pushed ahead. In June 2006 Korea and China concluded the open skies agreement within the scope of the third freedom and fourth freedom of the air for passenger and cargo in Sandong Province and Hainan Province of China, and agreed the full open skies of flights between the two countries from the summer season in 2010. However, China protested against the interpretation of the draft of the memorandum of understanding to the air services agreement, therefore the further open skies did not take place. Through the separate aviation talks with China from Korea-China FTA, the gradual and selective open skies of air passenger market and air cargo market shall be pushed ahead. Second, the competitiveness of air transport industry and airport shall be secured. As for the strengthening methods of the competitiveness of Korea's air transport industry, the support system for the strengthening of national air carriers' competitiveness shall be prepared, and the new basis for competition of national air carriers shall be made, and the strategic network based on national interest shall be built. As for the strengthening methods of the competitiveness of Korea's airports, particularly Incheon Airport, the competitiveness of the network for aviation demand creation shall be strengthened, and the airport facilities and safety infrastructure shall be expanded, and the new added value through the airport shall be created, and the world's No.1 level of services shall be maintained. Third, the competitiveness of aviation logistics enterprises shall be strengthened. As for the strengthening methods of the competitiveness of Korea's aviation logistics enterprises, as the upbringing strategy of higher added value in response to the industry trends changes, the new logistics market shall be developed, and the logistics infrastructure shall be expanded, and the logistics professionals shall be trained. Additionally, as the expanding strategy of global logistics market, the support system for overseas investment of logistics enterprises shall be built, and according to expanding the global transport network, the international cooperation shall be strengthened, and the network infrastructure shall be secured. As for the strengthening methods of aviation logistics competitiveness of Incheon Airport, the enterprises' demand of moving in the logistics complex shall be responded, and the comparative advantage in the field of new growth cargo shall be preoccupied, and the logistics hub's capability shall be strengthened, and the competitiveness of cargo processing speed in the airport shall be advanced. Forth, in the subsequent negotiation of Korea-China FTA, the further opening of air transport services sector shall be secured. In the subsequent negotiation being initiated within two years after entry into force of Korea-China FTA, it is necessary to ask for the further opening of the concessions of computer reservation system services, and aircraft repair and maintenance services in which the concessions level of air transport services sector by China is insufficient compared to the concessions level in the existing FTA concluded by China. In conclusion, in order to respond to the impact on Korea's air passenger market, air cargo market and aviation logistics market by Korea-China FTA, the following policy tasks shall be pushed ahead : Taking into consideration of national air carriers' competitiveness and nation's benefits, the gradual and selective open skies shall be pushed ahead, and the support system to strengthen the competitiveness of air transport industry and airport shall be built, and entry into aviation logistics market by logistics enterprises shall be expanded, and the preparations to ask for the further opening of air transport services sector, low in the concessions level by China shall be made.