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2007, Vol.16, No.2

  • 1.

    Allocating of Alternative Civil Service Personnel for Market Neutrality and Social Utility

    Sang Mok Lee | 2007, 16(2) | pp.3~36 | number of Cited : 5
    Abstract PDF
    Taking into consideration the concept of market neutrality and social utility, the question of reasonable input sectors and organizations of civil service personnel has been a serious issue and furiously debated. This survey is an theoretical and empirical study of the supply and demand for military manpower in the future, and provides implications for allocating of alternative civil service personnel while considering social demand on the one hand and the German example of the employment of alternative civil service personnel on the other hand.
  • 2.

    The Long-run Effects of Equity Investments and Its Regulations on the Intrinsic Firm Values; A VESA Approach

    이원흠 | 2007, 16(2) | pp.37~80 | number of Cited : 3
    Abstract PDF
    We develop an event study model, named as VESA (Value-based Event Study Analysis), which is basically based on the seminal works of M&M (1958, 1961, 1963). Using the VESA method, we test whether the changes of the intrinsic firm values come from the events experienced by the firms. We have studied the effects of equity investments on the firm values, which is measured by the “intrinsic Q values”. The empirical results are as follows; first of all, the equity investments show a statistically significant and negative changes in the intrinsic Q values. It means that the equity investments are value-destroying financial events. Second, the disposal of owned equity investments shows statistically significant and positive changes in the intrinsic Q values, but the intrinsic Q values are less than 1.0. It means that the disposal activities are not value-creating events. Third, the same results are shown in the equity investment-regulated samples such as “big business groups” in Korea. It means that the regulations in equity investments are not so effective as the government agency expects.
  • 3.

    The Impact of Tax Increases on Cigarette Smoking: New Evidence from Time Series Data

    hyungho youn | Kim, Song June | 2007, 16(2) | pp.81~102 | number of Cited : 9
    Abstract PDF
    The purpose of study is to analyze the impact of tax increases on cigarette smoking in South Korea, using monthly times series data of total domestic sales over the May 1997-September 2006. Myopic, rational addiction and difference equation models are employed reflecting the characteristics of time series data. The empirical results show that demand will adjust slowly to changes in price with the applications of the time series models of addiction to the demands for cigarettes. In addition, only the dramatic tax increase of 2005 was effective to reduce cigarette smoking, while the others seem to be irrelevant. This implies the increases in the prices of cigarettes significantly reduce cigarette smoking only when they are high enough to offset cigarette addiction effect. This study suggests several interesting policy relevant findings. First, it suggests that small increase of tax hardly reduces cigarette smoking because cigarette has addictive nature to offset the price impact. Second, it suggests that cumulative tax increases lead to cumulative significant smoking reduction. This implies that the long term reductions in cigarette smoking from a price increase will exceed the short term effects. This tends to support the implication of addictive behavior and the theory of rational addiction. Given the evidence of this study, the authors conclude that the impact of tax increases that result in sustained increases in the real prices of cigarettes will grow over time. Therefore the long run health benefits of higher cigarette taxes will be larger than the shorter benefits.
  • 4.

    A Case Comparison of Lottery Policy in Korea and California - The New Institutionalism Approach -

    윤광진 | 2007, 16(2) | pp.103~136 | number of Cited : 6
    Abstract PDF
    An explanation was given on the differences with focus on institutional differences between the lottery policies of Korea and California after the adoption of Lotto, the online lottery. The findings of analysis show that the lottery program in Korea is not well managed because of passivity in policy and regulation, including the Lotto regulations and market demand controls. This is due to lesser legal transparency, ineffective personnel management, and poor budget management. Lotteries in California, on the other hand, are well managed, thanks to the diversification of online lotteries, including Lotto, and proactive policies that address market demand. The California system benefits from greater legal transparency; effective personnel management; and sound budget management. For the effective management of the lottery program in Korea, this research indicates a number of conditions that must be met, namely, improvements in management, including greater legal transparency, more effective personnel management, and more sound budget management; proper public use of funds raised through lotteries; and greater awareness of and trust in the lottery program among the public.
  • 5.

    Power Market Restructuring and Government Regulation : Implication of the United States Cases

    김현숙 | 2007, 16(2) | pp.137~174 | number of Cited : 1
    Abstract PDF
    Power market of the United States consists of two different regimes, i.e., the integrated system of the north-eastern area including PJM, NYISO, New England ISO, and the unbundled system of California before 2001 and ERCOT. After the power crisis of California, there has been a preference toward integrated system in the United States, but it has had several weakness, too. The success of power market restructuring does not depend on only market structure, but also market design itself. We need to bring nodal pricing for appropriate price incentive for generators and set up the institutional framework for resource adequacy as well as demand response. For transmission pricing, system redispatch cost is better in terms of appropriate transfer between producer and consumer. Compared to vertical integration, the independent transmission operator is helpful for lowering entry barrier and prices. For retail competition, cost effective entrants are crucial and the current CES system can not initiate effective competition in the Korean power market. Finally, regulators need to design ex-ante monitoring and ex-post intervention system in order to prevent the exercise of market power before regulation begins.
  • 6.

    Investment in Basic Treatment Facilities and Environmental Regulation

    김금수 | 장영재 | 2007, 16(2) | pp.175~194 | number of Cited : 3
    Abstract PDF
    While existing literatures have analyzed, in turn, the direct provision of environmental quality through basic environmental facilities as well as the enforcement of environmental regulations, we simultaneously analyze the impacts of both activities. We provide a model of an environmental regulatory agency that tries to minimize non-compliance by choosing a combination of enforcement parameters under the constraints of a level of basic environmental facilities and limited budget. An empirical analysis of the Korean experience demonstrates that an increase in basic treatment facilities investment led to a decrease in regulators' inspection efforts.
  • 7.

    Legal Review on Regulations on a Bank's Subsidiary in Korea

    고동원 | 2007, 16(2) | pp.195~229 | number of Cited : 5
    Abstract PDF
    Article 37 of the Korean Bank Act provides for various provisions such as definition of a bank's subsidiary and regulations on a bank's transactions with its subsidiary. According to the Bank Act, a bank's subsidiary is defined as a “company of which 15% or more of shares with voting rights is owned by a bank,” and a bank's subsidiary is divided into a financial subsidiary and a non-financial subsidiary. In order to enhance the reasonableness of regulations on a bank's subsidiary, the following measures are recommended: first, since it is unclear whether a bank may have its overseas subsidiary, a revision of the relevant provisions is needed for clarification; second, because it is unclear whether an approval from a financial supervisory authority is required in case of acquiring shares of a financial subsidiary, measures for clarification are needed; third, since it is controversial whether a foreign bank branch in Korea may have its subsidiary, the provisions for the prohibition needs to be added in the Bank Act; finally, the current 15% ceiling for the bank subsidiary definition purpose should increase to 25%, and the concept of 'de facto control' needs to be adopted to the definition of a bank's subsidiary.