This paper aims at showing and somehow verifying the assertion that there is no significant distinct differences between social and economic regulations. In other words, it tries to show that under the existing classification concepts, it is not possible to analytically figure out substantial peculiarities of social regulation, comparing economic regulation. The introduction of such isomorphism seems to be quite important and urgent, considering the traditional economic-social regulation dualism extends a long shadow into the theory and policy practice of regulatory reform policy in general. The analysis is based on the viewpoint of J. Stigler which emphasizes the true nature of the regulation with the focus on the actual consequences not the stated purpose of regulations. As a result of the analysis, this paper could show that there are no particular differences between social and economic regulations in terms of their (actual not stated) goals, general characteristics of targets, the interest relations of the regulated group, and some specific characteristics of target industries and regulator network. Therefore, we must be aware of the possibilities of mistakes made by researches and practical policy suggestions derived on the basis of the dualism of social-economic regulations.
Generation capacity and market trading volume by private generation companies were less than 1% in 2001, however it reached up to 15% at the end of 2001. This sharp increase of market share by private sector is generally considered desirable, but could raise concerns of market power in the electricity industry. This study suggests two new indices to measure market power both in the market level and at firm level. Following Borenstein, Bushnell and Wolak (2002), we estimate the level of market power using data at firm level. Our estimation results using 2006 data suggest that the level of market power at market level is higher during summer than other seasons in 2006. In addition, this study suggests a new index to measure the level of market power at firm level, which is the relationship between market share of inframarginal firms and their frequency. This index implies that large firms tend to frequently determine the SMPs during the lower demand periods, while small firms tend to set the SMPs during higher demand periods.
This Study explores what account for the factors that promote regulatory reform for sustainable energy development. The findings suggest that policy decision makers' recognition and willingness significantly promotes regulatory reform for renewable energy and energy efficient use technology development. In addition, complicated procedures and environmental protection organizations substantially influence the regulatory reform for renewable energy development and varied network activities have significant impact on the regulatory reform for energy efficient use technology development as well. The final interesting findings are that economic conditions and private development organizations emphasized in conventional economic development are still significant in green economic development. Korean local governments need to pay attention to these finding to efficiently reform regulations for green economic development.
Intra-company transactions have two rather conflicting characteristics; Trade decisions are made by fiat in a ‘captive market’ among a group of related parties, while the terms of trade must reflect actual market situations. On the other hand, antitrust regulators and tax authorities are closely monitoring these transactions to prevent possible ‘unfair’ trading and/or tax evasions. In this paper, we explore an economic model to determine intra-company trade terms based on the arm’s length principle. Then, we evaluate several methods that can be used to apply such economic model to actual intra-company transactions.
The purpose of this study is to empirically address the impact of the complementarity of social institution and regulatory reform on economic growth. This study analyzed the relationships between the indicators of governmental, institutional, and regulatory attributes and economic growth of the 13 countries affiliated with OECD. The analysis results of this study are as follows: First, Korea, Japan and Czech Republic were weak in the managemental coordination and decentralized market. Second, the regulatory indicators had a negative impact on GDP in the strong countries in managemental coordination such as Germany, Ireland, and Norway. Third, the interaction of the decentralized market and regulatory indicators increased GDP. Fourth, the interaction of managemental coordination and regulatory indicators lowered GDP. This study shows that the regulatory reform can not influence the economic growth without consideration of social institution. Furthermore, the institutional reform can not influence the economic growth without consideration of regulatory context.
This paper examines the discussions related to ‘conglomerate tax’(tax on investment in affiliates) and numerically estimates the impacts of introducing this system on corporate finance and investment. The conglomerate tax means a tax policy for large-size business groups that excludes deduction of dividend incomes between affiliates and interest expenses on debt for investment in affiliates. First, this paper compares the current tax system of Korea internationally, reviews academic discussions, and also investigates changes on corporate finance due to the introduction of taxation applicable. This paper estimates the effects on capital cost and investment of abolishing the exclusion of dividend income from gross revenue and the deduction of interest expense for forty domestic major firms in numerical analysis. On the assumption that funds for investing in affiliates are proportional to debt ratio for forty firms except holding companies that conglomerate taxes are applicable to, the result from policy simulation is that the cost of capital increases by 0.64%, and the capital for production decreases by 1.07% due to the conglomerate taxes. To say it another way, the amount of investment reduction becomes ￦ 2740.1 billion in tangible asset and ￦ 2548.2 billion in net tangible asset. The analysis shows that the effect of abolishing the exclusion of dividend income from gross revenue is 10 times less than that of abolishing the deduction of interest expense. This is why the exclusion rate of dividend income itself is currently very low, so that dividend payout ratio and equity share of affiliate are low.
According to Article 6 of the Basic Act on Regulatory Reform (BAAR), all regulations for administrative agencies of the central government should be registered within the Regulatory Reform Committee (RRC). When government officials register regulations, they should be classified based on the ‘type of administrative act' and ‘attributes of regulation.' However, the current classification system has many problems, including lack of consistency and rationality. It leads to difficulty in understanding and low utilization by government officials, which results in incorrect registration and low utilization of statistics derived from the classification system. Therefore, it becomes necessary to revise and supplement the current classification methods. This study identifies and analyzes the defects and problems of current the classification system of government regulations in ternms of the registration system, and suggest how to formulate a new and supplemented classification system of government regulation from a long-term perspective.