2015, Vol.24, No.1

Journal of Regulation Studies 2023 KCI Impact Factor : 0.78

pISSN : 1738-7132
https://journal.kci.go.kr/ksrs2002

This study aims at evaluating the effect of the introduction of negative regulatory method. For this purpose, we developed a model and indicators based on theoretical foundation, and quantitatively evaluated the effect of negative regulatory method on corporate regulations in Saemangeum Special Economic Zone in Korea. The main results are as follows. First of all, the investment attraction, the start-up of new firms, the creation of added value, the sales and the job creation in Semangeum area would increase, and the regulatory burden would decrease. Also, the investment attraction and productivity improvement of firms in Saemangeum area were expected to generate production induced effect, added value induced effect, employment and labor induced effect across the country. However, if we considered the introduction of negative regulatory method not only to corporate activities sector but to other sectors, such as education, healthcare, tourism, etc, the effect would be much larger.

The present study addresses two issues important to job creation in the Korean service industry: the effect of entry regulations and firm size in generating jobs. Studies in other countries have shown that various types of entry regulations act as strong deterrents to entry into new markets in that they hinder job creation. Many such regulations currently exist in the Korean service industry. In spite of the important impact of such regulations, little research has been done on the effect of Korean entry regulations on job creation. The present study addresses the impact of such regulations on net job creation. A second point of controversy is the correlation between firm size and job creation: We therefore also examined the effect of business size on net job creation after controlling for the firm age . For our empirical analysis, we applied employment weighted least squares regression after generating a saturated dummy variable model using data from the annual Korean Establishment Census for the years 2000 through 2012. Our study shows that sectors in the service industry without entry regulations result in higher net job creation than those with entry regulations. As to our second inquiry, we found that the bigger the company, the higher the net job creation. These findings indicate that to the extent that entry regulations can be reduced, net job creation can be expected to go up. They further suggest that Korean job-creation policy should provide incentives for large businesses and more incentives for new businesses rather than focusing exclusively on small and medium size businesses, as it now does.

The desirable direction of the improvement in the dismissal legislation will be to increase the flexibility of the labor market, as well as to harmonize the working conditions and the job security of the non-regular workers, and especially to improve the regulation of individual dismissals of regular workers. Specifically as the market shifts to the increasingly competitive environment, the need for the ordinary layoff for the job misfits and low performers are growing. Hence, it is required that the government set a guideline to clarify the types and justification range of the ordinary dismissals, so that to reduce the uncertainty thus the companies to utilize the ordinary dismissal system. Such guideline shall be especially useful reference for the court when making the judgment for the low performers’ layoffs. Examples for the personal reasons for the ordinary layoffs guideline could be 1) when there is serious misfit(in job performance ability including working attitude and teamwork) such as to cause severe hindrance or damage in business management, and 2) when warning, training, education or transferring positions of workers to correct such misfits show no sign of improvement, and et. The legislation of the contractive dismissal(Änderungskündigung) system is required for the appropriate operation of the employment system and to protect the employee. The contractive dismissal system of Germen which allows the employer to change the working condition under certain requirement with the premise of employment continuity, needs to be adopted. Especially for low performers and misfit workers, it would be reasonable to apply the contractive dismissal system at first, and then apply ordinary layoffs if such contractive dismissal was not accepted.