ESTIMATING PRODUCTIVITY GROWTH IN THE KOREAN ECONOMY WITHOUT RESTRICTIVE ASSUMPTIONS

This study eliminates the effects of markup, returns to scale, and capital utilization from the Solow residual (SR) for Korea to derive an alternative measure for productivity. Empirical results show that markup generates significant bias in the SR, and that the alternative productivity measure is greater than the residual. Furthermore, money supply Granger‐causes the SR but does not Granger‐cause the alternative measure, suggesting that the new productivity measure is consistent with the neutrality of money. The results contradict the presumption that the SR with variable capital utilization represents true technology shocks because it is orthogonal to demand shocks.(JEL C32, E32, O47)     

Capital Regulation with Two Banking Sectors: Cyclicality and Implementation

We present a capital regulation policy in a model in which banks can choose to be unregulated, by operating in the shadow banking sector, when the cost of being regulated (restriction on portfolio risk) exceeds the benefit (cheaper funding/insurance). We show that the welfare maximizing capital requirement policy can be procyclical: lower requirement during booms and higher requirement during recessions. Our policy specifies the level of capital requirement as a function of the observed relative size of the unregulated and regulated banking sectors. This specification achieves the optimal aggregate risk exposure by obtaining the right mix of the two sectors.     

What Shapes Assessment of Ability to Pay for Children's College Education?

Many parents have concerns about the cost of their child's college and lack information about preparing for those expenses. Parents' assessment of ability to pay for college are likely to influence their investments in a child's education, and may in turn affect the child's educational commitment and attainment. These potential outcomes lead us to investigate what accounts for parents' assessment. We use logistic regression to analyze data collected from mothers with newborn children (N = 2,566). The findings demonstrate that the mother's assessment of ability to pay for the child's education are significantly associated with material hardship experiences, financial management skills, educational expectations, and her education level. We discuss research and policy implications of promoting positive financial assessment for college early.     

CEO Connectedness and Corporate Fraud

We find that connections CEOs develop with top executives and directors through their appointment decisions increase the risk of corporate fraud. Appointment‐based CEO connectedness in executive suites and boardrooms increases the likelihood of committing fraud and decreases the likelihood of detection. Additionally, it decreases the expected costs of fraud by helping conceal fraudulent activity, making CEO dismissal less likely upon discovery, and lowering the coordination costs of carrying out illegal activity. Connections based on network ties through past employment, education, or social organization memberships have insignificant effects on fraud. Appointment‐based CEO connectedness warrants attention from regulators, investors, and corporate governance specialists.     

Disappearing Dividends: Implications for the Dividend–Price Ratio and Return Predictability

The conventional dividend–price ratio is highly persistent, and the literature reports mixed evidence on its role in predicting stock returns. We argue that the decreasing number of firms with a traditional dividend‐payout policy is responsible for these results, and develop a model in which the long‐run relationship between the dividends and stock price is time varying. An adjusted dividend–price ratio that accounts for the time‐varying long‐run relationship is considerably less persistent. Furthermore, the predictive regression model that employs the adjusted dividend–price ratio as a regressor outperforms the random‐walk model. These results are robust with respect to the firm size.     

MEASURING PRICE ELASTICITY OF SECTORIAL IMPORTS

Previous published studies have estimated the long‐run cointegrating relationship to infer the price elasticity of imports, but a stable long‐run cointegrating relationship might not be detected in the data, especially in the case of sectoral data. This paper develops a method to estimate the price elasticity of imports based on a vector autoregression model, which can be applied when a stable long‐run cointegration relationship does not exist. The methods developed in past studies and our method are applied to Korean sectoral imports data to illustrate the usefulness of our method.     

危机后的金融体系框架——全球金融改革及其对于韩国的意义

在设计“危机后金融体系架构”时，我们会想到三个支柱：金融产业、金融市场（尤其是资本市场）以及金融监管。在讨论架构问题时，我将首先将注意力集中于全球金融市场，其次，也更重要的是，如何建设韩国的金融体系以反映它的经济和金融市场特性。我希望，即使将本文中的“韩国”替换为“中国”，它仍然能够为考虑“最适合于中国的中国金融体系架构”提供一个框架。我们必须记住，在全球趋势与国内特征之间取得平衡远比看起来困难。不过，无论它有多么困难，这都是我们必须努力的方向。从政策制定者的角度来看，最具有挑战性的议题就是处理系统性风险。各个国家的系统性风险来源是不同的．因此每个国家都必须建立一个能够最好地识别与管理其系统性风险的监管范式，尤其是宏观审慎性监管。     

Accounting for Income Taxes: Early Adoption Issues

This study investigates whether the revised AASB 1020 Income Taxes was adopted early by Top 100 publicly listed companies in Australia between 2000 and 2004. We found that only three of the companies adopted the revised standard before its implementation date of 1 January 2005. Interviews with senior company representatives indicated that the three companies had quite different reasons for early adoption. Non-early-adopting companies had considered that the revised standard would not make a material difference to their reporting results. Tax consolidations and the impending international financial reporting standards were regarded as more important issues.     

High‐Performance Work System and Organizational Turnover in East and Southeast Asian Countries1

In this paper, we examine the impact of high‐performance work systems (HPWSs) on both voluntary and involuntary organizational turnover rates. Most research on this topic has been done in the United States. Given the global competitive pressures confronting many of the countries of East and Southeast Asia, companies in this region are seeking to become more flexible and often adapt HPWSs practices. We explore the impact of HPWSs in both locally owned companies and subsidiaries of multinational corporations in Korea, Taiwan, Singapore, and Thailand. These countries have significantly different national cultures from the United States and most other Western countries and HPWSs effects in relation to turnover might vary from the studies based in the United States. Our findings are, however, somewhat consistent with U.S.‐based studies. In fact, HPWSs were found to be more effective in reducing turnover in locally owned companies than in subsidiaries of Western and Japanese multinational companies.