Transmission of central bank communication to emerging economies: Evidence from the Korean stock market

This study analyzes the impact of US central bank communication on financial markets in emerging economies. We find that informal communication from the Fed positively influences the Korean stock market at a greater magnitude than the US stock market. The results show that the Korean stock market experienced higher excess return when Korea's monetary policy decisions are uncertain, suggesting that central bank communication in central countries could transmit to emerging economics through their monetary policy decisions and uncertainty. In addition, various portfolios and individual equities have a positive market risk-return tradeoff in the presence of Fed communication only.     

PCT国际专利申请、技术缺口及对策研究

在知识经济时代,研发投入、专利技术与标准竞争已经成为企业市场竞争的关键成功要素,跨国公司正在成为专利技术的主要发明者和控制者。文章基于2002~2007年国际PCT专利申请数的面板数据和与之相关的关键信息,解释了国际PCT专利申请的发展趋势及结构差异,从理论上阐明了中国已经从开放经济中获得了一定程度的"静态惠益"和"动态惠益",并分析了中国制造的"技术缺口"及其深刻的基础原因,提出了具有操作性的政策建议。     

Small and medium-sized enterprises in the Republic of Korea: Implications for the development of technology-intensive industries

Korea's miraculous growth and meteoric rise as a newly industrializing economy have carried with them considerable costs. Initial reliance on Korean large business groups, the chaebol, was an appropriate policy choice for creating competitive advantage through economies of scope for the export market. However, the neglect of the small and medium-sized industrial sector and resulting weak backward linkages with parts industries have become a burden on the performance of these same big businesses. This issue is particularly critical because Korea must make a transition into more knowledge- and technology-intensive industries in the face of a rising real wage level. This paper examines how the underdevelopment of the small and medium-sized industrial sector undermined the overall efficiency of the Korean economy, in terms of added costs and low quality of final products produced by big businesses, thus hindering Korea's transition into more technology-intensive industries.     

The Political Economy of Strategic Trade Policy and the Brazil–Canada Export Subsidies Saga

In this paper we study the on‐going trade dispute between Canada and Brazil on export subsidies in the aircraft industry and the reasons for its escalation. This is a peculiar case of strategic trade policy insofar as the good, i.e. regional jets, is heavily dependent on sub‐systems that are imported in the two countries. The hypothesis that the dispute solely derives from the search for rents and externalities is therefore incomplete. Without downplaying the role of interest politics, we argue that in both countries ideas about the goals of trade policy have an important place in explaining why this dispute drags on. For Canada, the belief in a rules‐based trading regime has led it to strongly oppose violations, while insecurity about its competitiveness has led to a variety of government schemes to support firms in advanced sectors like aerospace. For Brazil, its place as a leader of the developing world acted as a rallying point for government and firms alike. The research also argues that the WTO process has actually made a resolution of the dispute more difficult by making it too costly for firms and countries to comply with the costs of losing.     

Impact of Environmental Regulations on Trade in the Main EU Countries: Conflict or Synergy?

In an increasingly integrated world with declining trade barriers, environmental regulations can have a decisive role in shaping countries’ comparative advantages. The conventional wisdom about environmental protection is that it comes at an additional cost on firms imposed by the government, which may erode their global competitiveness. However, this paradigm has been challenged by some analysts. In particular, Porter and van der Linde argue that pollution is often associated with a waste of resources and that more stringent environmental policies can stimulate innovations that may overcompensate for the costs of complying with these policies. This is known as the Porter hypothesis. While there is a broad empirical literature on the impact of trade on environment, the empirical literature on the impact of environmental regulations on trade flows is relatively scarce, very heterogeneous and presents mixed results. The innovative feature of this paper is its attempts to estimate, in a gravity setting, augmented with a proxi of environmental stringency, the impact of three major multilateral environmental agreements (MEAs) on 15 EU countries’ bilateral exports. According to our estimates, in the period 1988–2008, to be member of MEAs had a positive average impact on EU‐15 bilateral exports. This evidence can be partly explained by a possible trade diversion effect with respect to countries that did not sign MEAs and a corresponding trade creation effect among members of the environmental agreements. Furthermore, evidence coming from interaction effects estimates seems to show that for exporting countries, having signed the United Nations Framework Convention on Climate Change and the Montreal agreements partly mitigates (by the amount of the estimated coefficient) the negative impact of having a relatively more stringent environmental regulation on bilateral trade. This result could have important policy implications for the future international trade–environmental negotiations.     

Economic Crises and Migration: Learning from the Past and the Present

This article considers the effects of past economic crises and cycles on migration with a view predicting the effects of the crisis of 2008–10. It then uses very recent data to test these as hypotheses. It examines the great migration to the New World in the nineteenth century (including in response to the Irish potato blight) in some detail because this was largely unhampered by changes in migration policy. It then more briefly looks at twentieth‐century experience – the 1930s, the 1970s and Asia in 1997–98. The hypotheses tested are that migration is reduced by downturns in destination countries but hardly affected by the cycle in home countries; that such downturns also lead to some return migration; that existing migrants suffer the effects of downturns more severely than natives and that although downturns may affect the timing of migration policy changes, the latter owe more to underlying secular forces than to short‐term shocks. Data from 2008–09 suggest support for each of these hypotheses.     

预算软约束的成因与国有企业改革

目前,对于预算软约束的成因,学界尚未取得统一意见,在已形成的观点中,对这一现象只是有外生性和内生性两种解释。预算软约束理论的描述是社会主义国家普遍存在的一种现象,即在社会主义体制下,预算软约束会导致国有企业存在高负债情况,经济运行效率低,降低国有企业的自主创新能力等,这些因素的存在必然会影响国有企业的改革。其根本原因在于企业承担的政策性负担。推进国有企业改革,必须分离企业承担的政策性负担,要加强对国有企业的考核,增加企业再投资申请成本。同时,加快改进政府的经济职能。     

Financial Globalisation and Emerging Markets Volatility

The volatility of capital flows to emerging market (EM) countries and frequency of financial crises have imposed high welfare costs on the countries involved. The empirical literature provides, at best, a mixed picture on the relationship between long‐run EM country growth and financial integration. Meanwhile, the prevailing policy discourse regarding reform of the international financial system remains incomplete: the focus has largely been on either institutional and policy measures required of EM countries or international crisis‐resolution procedures. The role played by private financial markets and institutions in the developed world has not received adequate attention. This paper describes some of the structural features inherent in today's financial markets that directly contribute to the instability in EM capital flows.     

Measuring Vulnerability to U.S. Foreign Economic Sanctions

Economic sanctions are an important instrument of U.S. foreign policy. While politicians look favorably on unilateral economic sanctions as a policy instrument, many scholars attribute significant long-term economic costs to the United States and have doubts about their effectiveness. We outline a simple approach to assess the vulnerability of target countries to sanctions in order to develop focused sanctions and reduce unnecessary costs to U.S. business, avoid the imposition of sanctions on countries when sanctions are unlikely to have the desired effects, and determine what other countries must join the United States in imposing sanctions if they are to be effective.JEL Classification K330,F190     

The challenges and opportunities for the trade union movement in the transition era: two socialist market economies – China and Vietnam

Both China and Vietnam are undergoing a social experiment as they diverge from the path of their Soviet compatriots and attempt the transition to a ‘socialist market economy’. This article tackles the role of trade unions in China and Vietnam in the context of globalization and market-orientated economic reform by identifying both challenges and opportunities for the trade unions in the areas of policy formation at national level and participation in collective bargaining and dispute mediation at enterprise level. Trade unions in both countries will have a significant role on a wide range of social issues under their special political, social and economic systems in the transition era into the twenty-first century.     

A new innovation paradigm: European cohesion policy and the retreat of public science in countries in Europe's scientific periphery

This article seeks to undertake a critical assessment of the changing position of public science in the entrepreneurial ecosystem of the countries on the periphery of European research. These countries are driven by new innovation paradigm based on entrepreneurship, which are implemented within the European Smart specialization strategy (S3). This article argues that S3 is widely implemented in the cohesion countries and, while it provides substantial resources for science, technology, and innovation, it fails to provide sustainability in the public research sector. This has direct implications for policies concerning innovation and entrepreneurial ecosystems. In order to prove the thesis, the article provides theoretical argumentation for emergence of a new innovation paradigm, driven by the rise of the entrepreneurial ecosystem, its incorporation into S3, and a consequent retreat of science policy in favor of entrepreneurial policy. The empirical analysis is focused on the funding trends seen in the business and public research sectors over the last decade (2008–2017), which have clearly shown that S3 has not contributed, despite expectations, to an increase in public expenditure for science. This signifies S3's neglect of public research within entrepreneurial ecosystems and challenges the ability of S3 to reduce wide disparities in research and innovation performance across the European Union. This ultimately endangers the innovation potential of the entrepreneurial ecosystem itself.     

EMU and Labour Market Reform: Needs,Incentives and Realisations

Despite improving labour market conditions in recent years, a number of EMU countries still suffer from high and persistent unemployment. It could therefore be expected that labour market reform would be given a prominent position on the political agenda. The new constraints associated with the common monetary policy only increase the pressure for reform. Relying on the introduction of the single currency as a trigger for labour market reform may be a risky strategy. EMU generates a complex set of re‐optimising strategies of the players on the labour market, which makes it difficult to get a clear idea what impact it will have on labour market reform. Evaluation of recent reform measures does not make one confident either. The empirical analysis confirms to some extent the idea that countries with higher unemployment rates have carried out more labour market reform. This finding holds, however, only for countries that do not belong to EMU. EMU countries have on average carried out no more reform than countries outside EMU and any link between the initial unemployment level and the labour market reform indicators seems to lack. It may become apparent that more reform is needed once the macroeconomic environment becomes more unfavourable.     

A Global Assessment of the Economic Effects of Export Taxes

This paper uses a new detailed global data set on export taxes at the HS6 level and the MIRAGE global Computable General Equilibrium model to assess the impact of export taxes on the world economy. We find that removing export taxes would have worldwide effects: the average export tax on global merchandise trade was 0.48 per cent in 2007, with the bulk of these taxes imposed on energy products. The removal of these taxes would increase global welfare by 0.23 per cent, a larger figure than expected gains from the Doha Round. Both developed and emerging economies, such as China and India, would gain from such policies even if they currently impose export taxes. Medium and small food‐importing countries without market power (such as the least‐developed countries) would also benefit from the elimination of export restrictions – especially during food crisis situations. Both the energy sector and the export taxes implemented by the Commonwealth of Independent States countries appear to play a critical role in the overall economic impact of such a policy change. However, the fact that some countries, such as Argentina, would experience income losses due to such a policy change is a major challenge to overall positive reform in this area.     

Trade Policies in Southeast Asia in the Wider Asian Perspective

This paper takes stock of trade policies in Southeast Asia after the Asian crisis and in the wake of the current global economic crisis. It compares trade policies in individual Southeast Asian countries; places them in the context of regional and global economic integration; and particularly draws implications for the region from the rise of China and India. The first section looks at recent trade and FDI patterns in Southeast Asia. Then follows an overview of key trade‐policy trends, in the region overall and in individual countries. The next sections examine ASEAN countries in international trade negotiations and agreements: first in the WTO, especially in the Doha Round; then within ASEAN; and finally on cross‐regional FTAs. The paper concludes that ASEAN countries cannot rely on external tracks ‘from above’ for meaningful trade policy reform. Since the Asian crisis there has been a slowdown of reform momentum, and too much reliance on trade negotiations – especially FTAs. Rather, countries in the region have to rely on themselves –‘from below’ as it were. The engine of liberalisation and regulatory reform has to be home‐driven – as it was before the Asian crisis – with governments taking unilateral measures in response to internal and external conditions.     

Analysis on the determinants of currency invoicing in Korean trade

We investigate the determinants of currency invoicing in trade using import and export transactions data between Korea and its 30 major trading partners from 2000 to 2013. We find a noticeably different pattern of currency invoicing from advanced countries. For example, a large market share of Korean exporters in partner countries does not guarantee more use of the Korean won in currency invoicing. This might be attributed to a low degree of Korean won's internationalisation and the strong coalescing effect. We also observe that the higher the level of industry product differentiation, the weaker the coalescing motive. In addition, we verify that the share of invoicing in the currency of Korea's trading partner tends to be higher when the partner country has (i) a larger trade volume, (ii) higher level of financial development, (iii) lower inflation and lower price volatility and (iv) its own currency with lower transaction costs.     

Environmental policy and the inward investment position of US “dirty” industries

Do high pollution abatement costs have a disadvantageous effect on foreign direct investment in countries with a strict environmental policy? While it would seem to make sense to believe that they do, hard evidence based on trade data is hard to find. The following article tests the hypothesis for the USA and comes to some surprising conclusions.     

Monetary policy in a Union of 27: Enlargement and reform options

It is to be expected that by early 2006 the European monetary union will be enlarged by up to 10 countries. This poses the question as to whether the current decision-making structure in the common central bank is adequate for such a large membership. Not only will such a large number of national representatives impair the efficiency of decision-making, but monetary policy will have to deal with a much more heterogenous group of members. The following article addresses the problem of enlargement and discusses reform options for the central bank.     

我国出口贸易环境成本内在化效应的实证分析与政策建议

从成本效应角度看,环境成本内在化对我国的出口贸易有负面影响;从创新效应角度看,环境成本内在化对我国出口贸易有正面影响。但综合起来看,创新效应对出口的积极影响弥补了成本效应对出口的消极影响,最终会促进中国出口。既然环境成本内在化有利于实现环境保护与出口增加的双赢,中国应当加强实施环境成本内在化政策,包括进一步提高环境标准、推进自然资源价格改革、改变排污收费政策等。中国实施环境成本内在化的政策应当是经济手段与管制手段并用,但若着眼于未来,应当逐渐转向以经济手段为主。     

Examining the global reach of the 2008 US economic downturn

This article analyzes how the 2008 US economic downturn propagated through the global trading system, creating an economic contagion around the world. Consistent with previous global crises, the reach and impact of this crisis is not the same across different regions. This article contributes to the literature by examining the effect of dependency on the country of origin of a crisis, openness to international trade, and the role a country plays in the global trading network to explain the variation in the reach and the impact across countries. The article concludes with policy recommendations to avoid future economic contagions or reduce their impact. © 2011 Wiley Periodicals, Inc.     

Monetary Policy Accommodation at the Lower Bound

Monetary policy was too tight in many countries following the financial crisis, due to the lower bound on interest rates. This is likely to have prolonged the recession that followed. This point is illustrated with an assessment of monetary accommodation in the US since the financial crisis, and the accommodation achieved through negative interest rates in countries that have adopted these. The lower bound will likely give rise to considerable economic costs in the future, as it has in the recent past. There is an urgent need to consider how policy tools and frameworks should be adapted.