The small and medium sized enterprises with the aged management tend to neglect the investment in employment, research, and development to depress company vitality even though they make greater profits than other enterprises. Korean inheritance tax functions as a setback in the development of the company because it is still higher than those of other developed countries. One of 10 family-owned businesses had completed the succession work in Germany for the past five years. The family business succession has rapidly increased step by step to the point that about 70,000 small and medium enterprises proceed succession works per year. The succession has been made smoothly because there is no inheritance tax burden on family businesses. After the inheritance tax reform act took effect in Germany in January, 2009, 85% to 100% of the inheritance tax are deducted according to the management period and the level of employment maintenance after family business succession. When the gross wages for 5 years after family business succession become more than 400% of the gross wages at the time of the commencement of succession and the business has continuously maintained, 85% of inherited business properties are exempted from taxation. Moreover, when the gross wages for 7 years after family business succession become more than 700% of the gross wages at the time of the commencement of succession and the business has continuously maintained, 100% of inherited business properties are exempted from taxation. In case of Korean small and medium enterprises, in particular medium enterprises, the inheritance tax burden on family business is the cause of weakening competitiveness because it is excessive compared with Germany. While there is no inheritance tax burden on German companies keeping the requirement about the running of the company for 7 years, the inheritance tax over 9 times than German tax is imposed in Korea.
It is necessary to introduce German inheritance exemption and relief system for family-owned businesses actively and seek the facilitation of family business succession in order to produce the international 'hidden champions' like Germany. It is also needed to implement a plan that the inheritance tax is reduced every year and the total tax amount is exempted in 7 years when the business has maintained for a certain period after business succession. The introduction of the inheritance tax exemption and relief system will accelerate the continuous growth of companies to largely contribute to an increase in tax revenue, job creation, and economic growth. There will a fall in tax revenue at the initial stage that the system is introduced. However, if the growth continues because of the relaxation on inheritance tax burden of companies, the amount of corporation tax payment will increase according to profit generation and tax revenue will consequently increase. There will also be the effect of maintaining jobs because the company must maintain employment to have the tax exemption benefit of business succession. If German inheritance tax exemption and relief system for family-owned businesses is introduced, it is expected that about 130,000 jobs may be maintained.

This research is to observe case of Leepack Co., Ltd., and role of successor’s mother. According to our observation, we found and concluded how mother's emotion balances founder and successor, communication with successor, mediate between founder and successor, build trust between founder and successor, and build successor’s management skills. We found following implication by analyzing correlated factors and described.
First, successor’s mother acts as mediator between founder and successor to promote expansion of business. Second, mother manages human resources effectively inside family with and act as assistant and lead communication between successor, founder and employees with emotional management. Third, mother actively lead conversation between family members during dinner. Fourth, mother act as emotion reproducer between family members in family firm.
As we can see the practices of LeePack Co., Ltd., we can summarize how mother's emotion can correlate successor's management skills. First, mother's emotion affects positively balance with founder. Second, mother's emotion affects positively communicating with successor and founder. Third, mother's emotion affect positively build highly trust between founder and successor. Fourth, high trust between founder and successor affect positively building successor's management skills. Fifth, Mother's emotion helps successor to communicate smoothly and affect positively building management skills. Sixth, mother's emotion harmonizes with founder and affects positively building management skills.

This study aims to establish a paradigm to discover policies for successful succession for family business and leadership transfer after emphasizing their importance and to find influential factors. For this, it has attempted to explore important policies for leadership transfer through analysis of four successful cases on succession for family business. In terms of research methodology, a grounded theory, which is one of several qualitative research methods, has been used. According to the analysis, the following policies were suggested : 1) launching of Succession for Family Business Promotion Agency (tentative name), 2) differential estate and gift tax payment system, and 3) expansion of a research infrastructure on family businesses. This study is limited in that the results were obtained based on an in-depth interview amongst nine people from four companies only. Therefore, it is necessary to increase the number of businesses to be examined and interviewees or perform a more specified study to get more objective results. However, this study is significant in that it upgraded a study on family businesses from a tax-centered study to a leadership-oriented study and established a new paradigm by applying grounded theory to business administration.

In this paper, we analyse empirically the effect of private equity financing on R&D investment of innovative small and medium sized enterprises(SMEs) listed on Kosdaq Market of Korea Exchange. Korea Small and Medium Business Administration (SMBA) designates venture business, innobiz firms, and management innovative firms as innovative SMEs for policy purpose. The main results of this study can be summarized as follows.
Private equity financing has a positive and significant effect on R&D investment, and cash asset change and working capital change have negative and significant effects on R&D investment. This implies that SMEs use part of private equity financing for current R&D investment, and hold remaining part of private equity financing as ‘precautionary' cash asset and working capital until promising R&D investment opportunities will be found, and ultimately use large part of private equity financing for future R&D investment. However, private equity financing has a positive and significant effect on R&D investment of innovative SMEs, while it is insignificant for non-innovative ones. Moreover, private equity financing has a positive and significant effect on both asset-counted R&D investment and cost-counted R&D investment of innovative SMEs, while it is insignificant for non-innovative ones. Asset-counted R&D investment is counted as the intangible assets in the balance sheet, while cost-counted R&D investment is counted as the current expenses in the income statement. The intangible assets created by asset-counted R&D investment may act as an innovative driver that can have a greater multiplier effect on the firm value than the tangible assets.
In conclusion, this paper shows evidence that SMEs use private equity financing to fund R&D investment in the existence of the asymmetric information. Moreover, innovative SMEs use more private equity financing to fund R&D investment than non-innovative ones. These findings suggest a new policy implication into how private equity financing can be particularly valuable to promote R&D investment of innovative SMEs such as venture business, innobiz firms, and management innovative firms.

As economic uncertainty grows, small and medium-sized enterprises (SME) bear bigger burden due to their existing debt. In this regard, the government now changes its SME policy from liquidity-oriented capital support toward lower interest rate on SME debt and less financial cost. Especially, the Industrial Bank of Korea (IBK) was highly recognized by cutting the maximum interest rates on overdue loans in 2012. The bank's support to ease financial burden has impacted the overall loan market and the maximum interest rates in general were dramatically lowered. This study examines the IBK's interest rate policy and impact in the competitive financial market and provides lessons learned. This study bears a significance by looking at the SME financial policy and the role of a market-dominating financial institution in the entire domestic SME loan market, a competitive market on interest rate. In the hope of helping the national SME policy, this thesis examines SME policy from capital support to various transitional process.

The purpose of current study is to clarify the roles of organic and mechanistic elements of TQM and organizational learning capability (OLC) for domestic small and medium size enterprises (SMEs), and to provide a framework in which these three factors are interrelated with organizational innovation performance. To that end, we conduct a survey of SMEs in Korea to find out main effects of organic and mechanistic dimensions of TQM practices on SMEs' innovative performance, and a moderating effect of organizational learning capability between organic and mechanical elements of TQM practices and innovation performance. Using the samples of 100 firms, we found that the organic and mechanistic elements have positive direct effects on organizational innovation performance. But the only moderating effect we found is the one between organic elements and OLC on organizational performance, which indicates that SMEs should invest more efforts to build a balanced system for organic and mechanistic practices of TQM.

Venture firms pursue internationalization as a strategic decision that turns international experience through learning process and prior international experiences into internal knowledge which will contribute to the firm’s performance. International experiences and learning capability will be further accumulated as the firm goes through a higher phase of internationalization. This paper verified that the highest 3rd phased international experiences can enhance and learning capability can control the firm’s performance, using the eleven-year panel data of 194 exporting venture firms located in Seoul. According to this study, the 2nd and 3rd phases of internationalization influenced (+) at firm performance. And the learning capability indexes, proxied by ISO, Export, R&D, listing, venture certification and INNOBIZ, are solely also influenced (+) at firm performance. But, only venture certification is significantly controlled under 1st phase, R&D, listing, export are significantly controlled (-) under 2nd and 3rd phases with the firm performance. So, we also provided future study subjects that venture learning capability need to be develop for firm performance.

This study tries to find out how the related financial factors, that are the level of dependence of main creditor bank, corporate group strategy, affect on the relationship between the unlisted small and medium-size companies' raising fund and earnings management. These factors are omitted in the advanced research of relationship between funding and earnings management.
In this study, I tried to verify the effect of the total debt ratio and additional loans on the profit adjustment, and I tried to investigate the roles of variables, such as the level of dependence of main creditor bank, whether business group division is on or not, in the debt contract. Thus from the modified Jones Model(1991) I used the measured value of profit adjustment which is a major variables, an assumed discretionary accounting accruals from Kothari et al.(2005), and I analyzed regression models which are used by the Choi and the Kwak(2010). I empirically compared and analyzed 1,758 unlisted small and medium-size firms with the December fiscal year-end which satisfy the conditions, but don’t belong in the financial banking over 2004~2010. results are summarized as following. Firstly, the bigger of the scale of additional borrowing loans is and the higher total loan ratio is, most companies have a tendency to make their profit adjustments upward. Secondly, the level of dependence of main creditor bank had negative effect on the relation of additional borrowing loans or total debt ratio with the profit adjustment. Thirdly, additional borrowing loans or total debt ratio influenced on the profit adjustment whether a company was in the business group division or not. I proposed two meaningful points in this paper. One is that raising fund by the thesis of debt contract in the advanced research can be some causes of the inconsistent results of a company’s profit adjustment. The other is that the level of dependence of main creditor bank which is a company’s financial character, whether Business Group Division is in or not, have important roles as a inducement of company’s profit adjustment and financing variables.

This research aims to study the phenomenon of mutual growth between car manufacturers and the large sized first vendors in the automobile industry. We used two methodologies for this research. First, we conducted interviews, visiting the domestic and overseas production sites of seven suppliers of Hyundai and Kia. Second, we analyzed financial data of 135 large-sized first vendors based on the data provided by KIS-Value, especially comparing the performances of supplier groups according to their related automobile makers. Given that the fruit of joint overseas expansion is not reflected in operating profit rates which have been normally used in previous studies, this paper examined the performances in terms of not only operating profit rates but also net profit rates. The net profit rates include the profit earned from overseas market as equity method income. The major findings are that at least the large-sized partners of Hyundai and Kia seem to have grown with Hyundai and Kia. In addition, the partners of Hyundai and Kia have showed a better performance than those of foreign makers to a minor extent. This result, however, does not deny the polarization between the large and small businesses in the automobile industry. Rather than that, this result should be interpreted that the polarization between large suppliers and small and medium sized suppliers should be given more attention than before.

Local franchise industry that was active had great influence upon national economy. This study investigated efficiency of each franchise business to strengthen competitiveness of franchise companies by using DEA model. Not only CCR but also BCC of DEA model was used to investigate eight kinds of businesses of 2,298 franchisers. for instance, fast food (27), liquor (25), outeating (252), bakery and confectionery (18), miscellaneous wholesale and retail business (40), educational service (84), barber shop and beauty salon (23) and other services (28), and to examine efficiency of scale, CRS, DRS, IRS brand and frequency of external benchmarking reference by using the most efficient franchise business brand, CCR model and BCC model. Not only EnPAS 1.0 but also SPSS 18.0 program was used: And, not only three input factors such as number of employees, number of stores and advertising expenses but also two output factors such as sales and net profit during the term were used.
The findings were: First, fast food (4), liquor (7), outeating (9), bakery and confectionery (7), educational services (7), barber shop and beauty salon (7) and other services (5) were found to do business efficiently. Second, CCR model's total technical effect, BBC model's pure technical efficiency and scale efficiency were found to be ineffective not by scale but by technical reason. Third, the scale efficiency of both CCR model and BCC model was not efficient at total technical effect, pure technical efficiency and scale efficiency to be likely to increase profit as much as inefficiency was improved. Fourth, franchisers with DRS could improve operational efficiency: The franchisers should lessen input factors considering much smaller output increase, and the ones with IRS should increase output to elevate CCR and to improve inefficiency of the scale. Organizations with ineffective combination between input and output should follow bench marking of fast food (7), liquor (8), miscellaneous outeating (14), bakery and confectionery (3), wholesale business and retail business (11), educational services (14), barber shop and beauty salons (9) and other services (10).
This study investigated relative efficiency of local franchise companies to give ineffective input factors by scale and technology. The study found out the most effectively operating franchise companies to investigate the ones having low profit.