중소기업의 대기업 매출비율과 수익성간의 관계

Abstract

Small and medium enterprises complain to that large firms unreasonably discount the prices of products that they supply in South Korea. On the other hand, large firms continue to assert that they pay reasonable prices for the products received from small and medium enterprises. The lack of collaborative partnerships in the field of putting a price on the products causes many problems such as the destruction of an industrial ecosystem. In addition, fixing reasonable prices is very important because it fairly shares the performance of cooperation among the interested parties. Nevertheless, it is not easy to build a sound partnership in setting prices for the reason of one partner's greed to take more profits. The polarization of management performance between large firms and small and medium enterprises has become bigger in South Korea after the global financial crisis of 2004. The government of South Korea identified the unfair trade of practices of large firms as the main cause of the polarization and then publicly announced a ‘profit sharing' in which large firms share a realized earning more than a normal level with small and medium enterprises to promote the fair sharing between large firms and small to medium enterprises. But, it remains stationary and adversely causes the conflict among the members of the public. The primary cause is the absence of objective data on which the large firms reasonably set a prices or not on the products or parts supplied by small and medium enterprises. This study empirically tests whether large firms reasonably set prices or not on the products or parts supplied by small and medium enterprises in subcontract relationship. I have derived two propositions of the rationality of setting prices on products or parts, based on the background that large firms don't set a reasonable prices on the products or parts supplied by small and medium enterprises if the ratio of sales for large firms to total sales (hereafter LFTS) is a negative relationship with two profitability ratios (gross profit or loss to sales, operating income or loss to sales), because it means that small and medium enterprises don't get paid lower prices on sales to large firms than those for other small and medium business or market on the assumption that a manufacturing costs are constant or small and medium enterprises do not supply large firms with the products or parts at a discounted price on a volume purchase. Proposition 1, the relationship between LTFS and gross profit or loss to sales is likely negative because large firms with strong negotiation power can set a lower product price to take more profits than normal in a unilateral way. Performance evaluation by division in a large firm is expected to accelerate that situation. Proposition 2, the relationship between LTFS and operating income or loss to sales is likely negative because large firms assert setting lower prices of products proportional to marketing expenses and capital costs etc., that small and medium enterprises reduce as a result of cooperation with the larger business. The sample consists of 3,346 manufacturing small and medium enterprises in a subcontract relationship with large firms listed in network loans from the 2007 to 2009 fiscal years. The data collected from the database of the Industrial Bank of Korea or Korean enterprise data is analyzed by regression. A Network loan is a financial system whereby banks lend money to small and medium enterprises by taking receivables which they receive from large firms as security. The regression model is PROF_GS_(i,t)(PROF_OS_(i,t))=β₀+β₁NAPUM_(i,t)+β₂RND_(i,t)+β₄INVEST_(i,t)+β₅SIZE_(i,t)+β(j)Σr_(j)Year_(j)+β(l)Σk(l)Upjong+θ_(i,t) PROF_GS_(i,t) : the ratio gross profit or loss to sales,PROF_OS_(i,t) : the ratio of operating income and loss to sales,NAPUM_(i,t) : the ratio of sales for large firms to sales(LFTS),RND_(i,t) : ordinary research and development cost divided by sales,LEVER_(i,t) t : total liabilities divided by total assets,INVEST_(i,t) : non-current assets divided by total assets,SIZE _(i,t) : natural log of total assets,Year : year dummies, Upjong : industrial dummies The results of this study can be summarized as followed. First, in the results of regression using gross profit or loss to sales as a reasonable price measure, the coefficient on LFTS is significantly negative as expected, which implies that small and medium enterprises get paid lower prices by large firms than those for other small and medium enterprises or the market. But, it doesn't mean that large firms unreasonably set prices on the products or parts, including a minimum margin to survive as small and medium enterprises complain. Second, using operating income or loss to sales the coefficient on LFTS is significant negative. In addition, the coefficient on LFTS is stronger in the case of using gross profit or loss to sales than using operating income or loss to sales as a reasonable price measure. Those results show that large firms don't set a price on the products, including marketing and capital expenses, which small and medium enterprises reduce in the subcontract relationship, as large firms continued to assert. Research and development costs and investment assets using as control variables have a significant positive relation with a reasonable price measure. These results confirm that small and medium enterprises of South Korea efficiently allocate resources. Adversary, firm size and leverage ratio have a significant negative relation. Especially, the result of firm size being different as expected is estimated to stem from the fact that small and medium enterprises with larger sizes sell the products or parts at a discounted price at wholesale. The findings of this study have the following implications. The relationship between LFTS and gross profit or loss (operating income or loss) to sales is significantly negative, which implies that large firms do not reasonably set prices of products supplied by small and medium enterprises. This plays an important role in reducing the conflict among members of the public, especially between large firms and small and medium enterprises and promotes the advance of ‘profit sharing' which the government of South Korea carries forward by providing objective data on the reasonability of setting prices of products in a subcontract relationship. This study has several limitations. First, I didn't consider the chance that large firms will purchase the products or parts at a discounted price with a large transaction. The results of this study won't correctly reflect the rationality of setting prices on products or parts if small and medium enterprises supply them at a discount. Second, I assume that small and medium enterprises produce just only one type of product or parts and manufacturing costs per unit is constant with other types of products or parts. Third, the sample consists of small and medium enterprises with relatively high credit and a large size. It is inappropriate for the results of this study to be applied to all types of small and medium enterprises.