The Korea Local Administration Review

This study analyzes how local currency affects the sales of small businesses. The consumer survey results show that local currency, which is limited to the available industries and sizes, increases sales of small businesses through additional consumption or change of purchase places. When allowances are paid for policy purposes in response to COVID-19, local currency helps prevent the decrease in consumption due to saving and the concentration of capital in some large stores. In a panel regression using quarterly survey data, the increase in the amount of local currency payment has a statistically significantly positive correlation with the increase in sales. The effects are evident in almost all types of small businesses.