Contests for catch shares

Review of Economic Design - We study contests in which fishers (or players), in a fishery managed under a catch-share program, compete over catch shares by expending irreversible effort, and the...     

Exploring the impact of economic integration agreements through extreme bounds analysis

This article provides an empirical strategy guided by the data to estimate the effects of Economic Integration Agreements (EIAs) on trade flows and their transitional dynamics. The strategy uses Extreme Bounds Analysis (EBA) to guide the choice of lags and leads in the effects without researchers' discretion involved. We show that arbitrarily selected year intervals and starting year can result in non-robust estimates of transitional dynamics of the effects of EIAs on trade flows. The empirical strategy follows two steps: EBA first sifts lags and leads of EIAs robustly related to trade flows from candidates, then these are included in the gravity equation to estimate the effects of EIAs on trade. We find that various lags and leads are robustly and positively related to trade flows, and the lag and lead structure depends on the level of integration. Our results show that EIAs have a long-term effect of 63% on trade flows. Under the richer lag and lead structure, deep-integration agreements beyond the level of free trade agreements have a much higher impact on trade flows than free trade agreements do (132% vs 31%). The estimates of effects of EIAs obtained from EBA-based estimation have a smaller contemporaneous effect and larger phased-in effects compared to previous studies relying on the subjective choices of year intervals while similar results are observed with the decomposed EIAs.     

Glass ceiling or sticky floor? Evidence from a distributional approach of the gender wage gap among PhD holders in South Korea

This study examines the gender wage gap, to explore whether a glass ceiling (large unexplained wage gaps in the upper percentiles) or sticky floor (large unexplained wage gaps in the lower percentiles) exists in the wage distribution of the most educated Koreans. This study focuses on seeking these distributional patterns for a theoretically homogeneous gender group, relying on a smaller dataset of PhD holders. Counterfactual methods combining recentered influence function decomposition with propensity score matching allow us to estimate how the wage gap between statistically similarly matched males and females, varies across the unconditional wage distribution. There is evidence of a strong sticky floor and a limited glass ceiling among Korean PhD holders. Results show that a negative relationship between a high level of education and the gender wage gap cannot be taken for granted, at least in South Korea. Even female PhD holders suffer from gender discrimination, especially when they are at the bottom end of the wage distribution.     

Sectoral FTA gains,conflicts, and the role of interindustry factor mobility: Evidence from Korea's free trade agreement

Free trade agreements (FTAs) can ignite domestic conflicts between export- and import-competing industries over trade gains. However, if the factors of production, such as capital and labour, move freely across industries, the returns to factor owners will quickly converge. Then, sectoral conflicts over FTAs will be less likely to arise. We analyse the case of South Korea's FTAs to measure (a) sectoral FTA gains and (b) interindustry factor mobility and to examine (c) the role of interindustry factor mobility in mitigating sectoral conflicts over trade policies. South Korea is an ideal case study due to the low barriers to domestic geographic mobility and high trade dependence. Based on data on its trade with 252 countries and factor returns between 2002 and 2017, we find that export industries did not gain much from the FTAs, while the import-competing agricultural sector was the winner. Sectoral conflicts greatly decreased over 2008–2010. Interindustry capital mobility plays a significant role in weakening the sectoral conflicts, while the impact of interindustry labour mobility is limited.     

E-commerce retail and reverse factoring: A newsvendor approach

This study builds a theoretical model to examine how supply chain finance (SCF) services using fintech can ease e-commerce suppliers' capital constraints. Despite the innovation in the logistics industry during the Fourth Industrial Revolution and the increasing online shopping in the post-COVID era, small e-commerce enterprises may fail to grow owing to their budget constraints. Reverse factoring is believed to ease such suppliers' capital constraints. We analyze the effect of reverse factoring using the capital-constrained newsvendor model, and we consider the impacts of additional funding from SCF services. Our results show that SCF services reduce e-commerce suppliers' initial orders and, thus, alleviate their budget constraints. This finding suggests that the discount factor of reverse factoring should be higher to ease small suppliers' budget constraints and allow the e-commerce industry to grow sustainably.     

Firm size-specific trade effects of regional trade agreements: Estimating extensive and intensive margins of trade

We estimate the impacts of Korean firms’ participation in regional trade agreements (RTAs) on the extensive and intensive export margins by identifying exporting firms based on their firm size—small and medium-sized enterprises (SMEs) and large enterprises (LEs) at the 5 399 HS six-digit commodity level—and specifying characteristics of RTAs from 2004 to 2015. We apply the EK Tobit estimation technique to control zero trade and the OLS estimation with importer-product and time fixed effects to alleviate the endogeneity problem. We find that firm size, product type, and depth of RTA significantly matter. Specifically, we find that deeper RTAs with larger, developing, and closer members significantly enhance the export creation effects of SMEs and LEs. Regarding the firm size-specific effects, we find that SMEs are less sensitive to exploiting RTA participation but more sensitive to the import market size, bilateral and relative trade costs, and the RTA characteristics. LEs’ export creation is mainly driven by the intensive margin, while SMEs’ export creation is driven by extensive and intensive margins (slightly more by the extensive margin). For the product-specific effects, we find that Korea's major exportable products such as chemicals, basic metals, motor vehicles, and transport equipment generate significantly strong export creation effects for both LEs and SMEs through their participation in RTAs.     

The effect of option listing on financing decisions

This paper investigates the effect of option listing on corporate financing decisions. Firms experience a significant drop in leverage, which is driven mainly by an increase in new equity issues. This effect is more prominent in firms with greater information asymmetry and lower percentages of quasi-index and transient investors before listing and those with active options trading after listing. After options are listed, the newly listed firms hold more cash and engage in more acquisitions, which are funded mainly by equity issues. These findings suggest that option listing has a significant impact on financing decisions because of lower information asymmetry and that firms use the post-listing equity to build up financial slack and support major investments, such as acquisitions.     

The relationships of financial literacy with both financial behavior and financial well-being: Meta-analyses based on the selective literature review

This study conducted meta-analyses of the relationships between financial literacy and both financial behavior and financial well-being. Peer-reviewed articles published on financial literacy in the field of consumer studies were collected by July 29, 2020. Fourteen articles were eligible for the meta-analyses. The results showed positive relationships of financial knowledge with desirable financial behavior and financial well-being. Our comparison of objective and subjective financial knowledge indicated that subjective knowledge had stronger relationships with both financial behavior and financial well-being than objective knowledge. These two types of knowledge also had different paths to financial well-being in that subjective knowledge had both direct and indirect effects on financial well-being through financial behavior, whereas objective knowledge only had an indirect effect. The relationship between financial knowledge and financial behavior appeared stronger in cross-sectional data than in longitudinal data. The implications of these results and possible directions for future consumer science research were discussed.     

Ostracizing sources avoid communal tastes: Effect of ostracizing behaviour on extraordinary consumption

Although people often exclude others in their daily encounters and social media interactions, no consumer research on ostracism has solely focused on sources of ostracism. We argue that the influence of ostracism on evasive behaviour is worth investigating since the scant academic investigations on sources are limited to their reparation intentions for their harmful behaviour. Three experiments were conducted to examine the influence of ostracizing behaviour (vs. neutral vs. social interaction) on extraordinary consumption in face-to-face and social media contexts. It was uncovered that sources sense dissonant feelings in dissimilar contexts when their behaviour transcends society's normative boundaries and, hence, prefer consumption that does not commonly appear in society as a means to evade this dissonance. The effect was moderated by sources' justification of their behaviour. We initiate consumer research on sources of ostracism and contribute to the marketing practice of introducing extraordinary consumption options by investigating the psychological consequences of ostracizing behaviour.     

The impact of COVID-19 on consumer evaluation of authentic advertising messages

This study investigates the relationship between the COVID-19 threat and consumer evaluation of a product with authenticity appeals in advertisements. We propose that threatening situations like COVID-19 motivate consumers to lower their uncertainty and increase their preference for products with authentic advertising messages. Because individuals react differently to threatening environments according to their early-life experiences, commonly reflected in childhood socioeconomic status, we examined whether childhood socioeconomic status moderates the relationship between threat and consumer evaluation of authenticity in advertisements. First, secondary data from Google Trends provided empirical support for our predictions. In additional experimental studies, participants evaluated different target products in four studies that either manipulated (Studies 2 and 3) or measured (Studies 4 and 5) COVID-19 threat. Our results provide converging evidence that consumers positively evaluate products with authentic advertising messages under the COVID-19 threat. Consumers' motivation to lower their uncertainty underlies the effect of COVID-19 threat on their evaluation of authentic messages (Study 3). This attempt to reduce uncertainty is more likely to occur for consumers with relatively higher childhood socioeconomic status (Studies 4 and 5). These findings suggest that using authenticity appeals during a pandemic could effectively reduce consumers' perceived uncertainty and generate positive consumer evaluations.