This study analyzes the factors affecting the sales, operating profits, and expenses of the domestic self-employed by using the MDIS data of the wholesale and retail industry for the last 20 years.

First, the operating profit of the self-employed has been on a downward trend since the 2010s. As of 2019, the average operating profit fell to 16.87 million won in the wholesale and retail business and 12.89 million won in the lodging and restaurant business. This was significantly lower than the operating profit of 20 years ago (on a real value basis).

Second, the decline in operating profit was attributed to cost increases while sales growth was limited due to market competition. In particular, the biggest increase among expenses was ‘other expenses’. The proportion of other expenses to sales more than doubled from 4.6% in 2000 to 9.5% in 2019 in the wholesale and retail industry, and in the lodging and restaurant industry, it increased from 45.8% to 66.9% during the same period.

In addition, as a result of analyzing the factors affecting the sales of the self-employed, there was a tendency for the surplus of self-employed people to significantly decrease sales. When the surplus increased by 1,000 people, the sales of the self-employed in wholesale and retail business decreased by 0.76 to 0.94 million won, and the sales of the lodging and restaurant businesses tended to decrease by 1.49 to 2.36 million won.

Lastly, the surplus of self-employed and rising costs in the wholesale and retail business lowered the average annual operating profit by 1.26 million won and 1.11 million won, respectively, and these magnitudes were strong enough to reach 3.95% and 3.48% of the operating profit. In the case of the lodging/ restaurant industry, the decrease in operating profit due to oversupply and rising costs was found to be 6.07 million won and 2.12 million won on average, which corresponded to 25.04% and 8.75% of the average operating profit.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Overview of Previous Studies and Contribution of This Study
　Section 1 Domestic Literature
　Section 2 International Literature

Chapter 3 Time-Series Analysis of Self-Employed Business Performance
　Section 1 Wholesale and Retail Sector
　Section 2 Accommodation and Restaurant Sector

Chapter 4 Regression Analysis of Factors Influencing Sales of Self-Employed Businesses
　Section 1 Data Construction and Description
　Section 2 Empirical Model and Estimation Methods
　Section 3 Estimation Results for Sales Influencing Factors: Wholesale and Retail Sector
　Section 4 Estimation Results for Sales Influencing Factors: Accommodation and Restaurant Sector

Chapter 5 Comprehensive Analysis of Factors Causing Management Difficulties for Self-Employed Businesses
　Section 1 Overview of Analysis Approach
　Section 2 Analysis of Management Difficulty Factors: Wholesale and Retail Sector
　Section 3 Analysis of Management Difficulty Factors: Accommodation and Restaurant Sector

Chapter 6 Conclusion and Policy Recommendations
　Section 1 Summary of Research Results
　Section 2 Policy Recommendations

References
ABSTRACT