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중소 벤처기업의 발전과 장외시장의 활성화(Development of small and medium enterprises, and venture companies, and activation of OTC)

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Title 중소 벤처기업의 발전과 장외시장의 활성화(Development of small and medium enterprises, and venture companies, and activation of OTC)
Similar Titles
Material Type Reports
Author(Korean)

최범수; 이기환

Publisher

[서울]:한국개발연구원

Date 1996
Series Title; No 연구보고서 / 96-14
Pages 309
Subject Country South Korea(Asia and Pacific)
Language Korean
File Type Documents
Original Format pdf
Subject Industry and Technology < Entrepreneurship
Holding KDI; KDI School

Abstract

The objective of this study is to analyze small and medium enterprises (SMEs), venture companies, and the over-the-counter market (OTC) in Korea and overseas, to provide basic information for recent (1996) system improvements and to seek directions for the development of future Korean curb markets.

In Korea, the focus of economic development has been on cultivating large companies, and the development of SMEs was relatively delayed. However, the development of SMEs is essential in promoting balanced development and economic efficiency, since SMEs constitute the basis of industry in Korea. The proportion of SMEs in the national economy of Korea is constantly increasing: 98.9 percent of all companies, 68.9 percent of all employees, 47.8 percent of total production, and 50.3 percent of added values as of the end of 1993. The cultivation of advanced technology has been implemented as the core of economic policy since the early 1980s, and effort has been made to establish venture capital companies, simplify the business start-up process, and provide tax and financial support to develop venture companies.

With the liberation of banking and opening of capital markets, large companies have increased their dependency on direct banking markets. However, SMEs are still dependent on the loans from financial institutions. Thus, it is necessary to reduce financial costs and ensure stable capital procurement sources by promoting the utilization of direct banking. In the current market, where the trade conducted is focused on large companies, the capital procurement for SMEs is limited due to strict listing standards.

In the U.S. and England, NASDAQ opened in 1979 and USM (Unlisted Securities Market) in 1980 to facilitate financial procurement through OTC to resolve problems of financial procurement for SMEs in the stock market. Japan also opened the JASDAQ system in 1991 and the E.U. is designing the EASDAQ. The main global markets are making efforts to activate OTC as the role of SMEs is expanded.

However, OTC in Korea has limited trade volume and low liquidity. It fails to guarantee investor profits corresponding to high risk. It is also burdensome for companies to be obliged to receive external audits and public listings from registration with very little effect of financial procurement.

In the economically advanced countries, the role of SMEs and venture companies is proportional to the degree of activation of OTC. In order to activate OTC, the political judgment should be arranged whether to maintain the OTC as a supplementary and preliminary market to the trade market, or to develop as an independent and competitive market.