[Title Page]
Contents
I. Introduction 9
II. Government Financing for SMBs in Korea Today 15
1. Government financing for SMBs in Korea today 15
A. Credit guarantees 15
B. Government financing programs of the SMBA 21
C. KOFC 24
D. KVIC 30
III. Evaluation of Government Financing for SMBs 34
1. Inefficient distribution of resources 34
2. Absence of an effective governance structure 38
3. Governmental meddling and redundancy 41
4. Quantitative analysis of government financing programs for SMBs 45
A. Opinion poll sampling 45
B. Basic statistics 46
C. Statistical analysis 59
D. Analysis of the effects of government financing for SMBs 98
IV. Summary and Implications 103
Bibliography 109
〈Table II-1〉 Government Financing Agencies and Programs for SMBs 16
〈Table II-2〉 Credit Guarantees Provided for SMBs 17
〈Table II-3〉 KTFC's Credit Guarantees for Startups and Technology SMBs 17
〈Table II-4〉 KCGF's Government Financing Programs 18
〈Table II-5〉 KTFC's Government Financing Programs 19
〈Table II-6〉 SMBA's Financing Programs for SMBs 21
〈Table II-7〉 SMBA's Plan for Government Financing for SMBs, 2014 22
〈Table II-8〉 SMBA's Government Financing Programs for SMBs in Different Phases 23
〈Table II-9〉 On-lending Conditions 25
〈Table II-10〉 On-lending Loans 25
〈Table II-11〉 Annual Contributions to the Growth Ladder Fund 27
〈Table II-12〉 KOFC's Government Financing Programs 28
〈Table II-13〉 Fund of Funds: Contributions 31
〈Table II-14〉 Investment Funds Created by the Fund of Funds 31
〈Table II-15〉 Job Creation Fund Today 32
〈Table III-1〉 Distribution of SMBs by Type of Government Financing Received 45
〈Table III-2〉 Distribution of SMBs by Year of Foundation 47
〈Table III-3〉 Distribution of SMBs by Growth Phase 48
〈Table III-4〉 Manufacturing vs. Non-manufacturing 49
〈Table III-5〉 Exporting vs. Non-exporting 50
〈Table III-6〉 Locations of Headquarters, Main Factories, or Research Labs... 51
〈Table III-7〉 Financial Characteristics 53
〈Table III-8〉 Financial Characteristics 55
〈Table III-9〉 Employment Statistics 57
〈Table III-10〉 Employment Statistics 58
〈Table III-11〉 Growth in Sales, Employment, and Operating Income by Business... 60
〈Table III-12〉 Growth in Sales, Employment, and Operating Income after Recent... 60
〈Table III-13〉 Management Prospects by Business Category 61
〈Table III-14〉 Ownership structure 63
〈Table III-15〉 Distribution of Government Financing by Business Category and... 64
〈Table III-16〉 Fund of Funds Investment (including Startup Investment)... 66
〈Table III-17〉 Financial and Employment Status in the Year Preceding Government Investment 67
〈Table III-18〉 Financial and Employment Status in the Year Preceding Government Loans/Credit Guarantees 69
〈Table III-19〉 Recent Channels of Financing 70
〈Table III-20〉 New Target Channels of Financing 72
〈Table III-21〉 Experience with Angel Investment 73
〈Table III-22〉 Experience with Startup Investment 74
〈Table III-23〉 Appropriateness of Prices at Which Startup Investors Acquired... 75
〈Table III-24〉 Discount Rates on the Prices of Stock Acquisition by Startup... 75
〈Table III-25〉 Startup Investors' Involvement in the Management of Invested... 76
〈Table III-26〉 Forms of Startup Investor Involvement in Management 77
〈Table III-27〉 Level of Effectiveness of Each Form of Involvement 78
〈Table III-28〉 Forms of Startup Investment 80
〈Table III-29〉 Frequency of Required Submissions of Management Reports 80
〈Table III-30〉 Frequency of Board Meetings Held in 2013 81
〈Table III-31〉 Size of Board of Directors 82
〈Table III-32〉 Board of Directors Membership 83
〈Table III-33〉 Availability of Stock Options 84
〈Table III-34〉 Aim of Stock Options Use 85
〈Table III-35〉 Reasons for Not Using Stock Options 86
〈Table III-36〉 Stock Market Listing Years 88
〈Table III-37〉 Future Plans for Stock Market Listing 89
〈Table III-38〉 Experience with M&A 89
〈Table III-39〉 Purposes of M&A 91
〈Table III-40〉 Future Plans for M&A 92
〈Table III-41〉 Forms of M&A Currently Considered or Planned 93
〈Table III-42〉 Future Plans for Selling Out 94
〈Table III-43〉 What is Needed to Increase M&A among SMBs? 95
〈Table III-44〉 Regression Analysis of Sales Growth Rates in 2013 100
〈Table III-45〉 Regression Analysis on Operating Income Growth Rates in 2013 101
〈Table III-46〉 Regression Analysis on Employment Growth Rates in 2013 102