House Prices and the Stance of Monetary Policy: The Case of Korea

Abstract

This paper is an empirical investigation on whether the Bank of Korea should respond to the housing price developments in conducting monetary policy. For that aim, we construct a small scale empirical model of the Korean economy, simulate the estimated model with a set of alternative monetary policy rules, and compare the stabilization performances of those rules. There turns out to be ample room for further stabilization of inflation and output, if the central bank shifts from the historically conducted monetary policy rule to the optimal rule. The stabilization gains under the optimal rule, however, are not attributable to additional policy indicators (such as housing price inflation) the optimal rule involves. Rather, the optimal rule improves upon the historical one because the former takes a quite different reaction scheme toward the historical policy indicators. Moreover, as long as the Bank of Korea maintains appropriate reactions to the historical policy indicators, housing price inflation does not contain much extra information for further stabilization     

Understanding supplier structural embeddedness: A social network perspective

Despite a significant amount of attention, the potential of supplier structural embeddedness (i.e., the value of the structural position in an extended network) to improve the performance of a buying firm remains poorly understood. This study drew on the social network theory to empirically examine a conceptual framework specifying a relationship between the efforts of a buying firm to understand supplier structural configuration and operational and financial performance. This study also examines how the comprehension of structural embeddedness is transformed into performance for a buying firm through relational embeddedness (i.e., the strength of a dyadic relationship). Survey data collected from companies in the U.S. were analyzed using hierarchical regression analysis. The results indicate that the understanding of the structural dimension does help to enhance operational performance of a buying firm, but it does not lead to better financial performance. Empirical evidence shows that a buying firm does improve the quality of a dyadic relationship between the buying firm and a supplier by understanding how the supplier is connected to other firms and what positional values are produced. Further, relational embeddedness is found to mediate the influence of the enhanced understanding of the structural configuration on operational performance.     

Suppliers’ Participation in a Single Buyer Electronic Market

Business to business (B2B) is the fastest growing segment of the explosive growth of e-commerce. The purpose of this study is to identify internal factors which influence the supplier’s intention to adopt private exchange (PE), a single buyer side electronic market (EM). This study identified cost, flexibility, delivery, and quality as internal capabilities and investigated how these four factors influence suppliers’ participation in PE. The results of the study indicate the following: (1) suppliers do not believe that their capability to produce customized products for customers plays an important role in PE; (2) they still believe that standardized rather than engineered products would dominate the marketplace; and (3) a contractible factor like lower price, rather than non-contractible factors including superior flexibility of production capability, fast and reliable delivery, and quality, plays an important role in the PE.     

Internationalization of Chinese and Korean firms

This article compares and contrasts the growth of Chinese and Korean multinational enterprises (MNEs). The article identifies the similarities and differences between Chinese and Korean MNEs in terms of motivations for internationalization, expansion strategies, and paths. The goal of this article is to contribute to the literature by shifting focus on host‐country conditions to home‐country conditions in explaining the drivers for firms' internationalization. We conclude that firms are motivated to expand abroad when faced with domestic competitive disadvantages resulting from absence or deficiency of one or more of Porter's Diamond attributes in their domestic market. Implications for further studies are also explored. © 2009 Wiley Periodicals, Inc.     

Experiments on strategic choices and markets

Much of experimental research in marketing has focused on individual choices. Yet in many contexts, the outcomes of one’s choices depend on the choices of others. Furthermore, the results obtained in individual decision making context may not be applicable to these strategic choices. In this paper, we discuss three avenues for further advancing our understanding of strategic choices. First, there is a need to develop theories about how people learn to play strategic games. Second, there is an opportunity to enrich standard economic models of strategic behavior by allowing for different types of bounded rationality and by relaxing assumptions about utility formulation. These new models can help us to more accurately predict strategic choices. Finally, future research can improve marketing practice by designing better mechanisms and validating them using experiments.     

Chromosomes and the Slutsky Equation: Lessons from 21st Century Genetics for 20th Century Economics

Reductionist scientific methodology has been at the forefront of economics research for much of the past 50 years. This short essay argues that recent discoveries in genetic engineering show that the study of complex phenomena might not be best served by such an approach, but rather by one that takes into consideration more evolutionary approaches. This provides a tremendous opportunity for the field of bioeconomics to establish itself as a major school of though, going into the future.     

Sketching: Friend or Foe to the Novice Designer?

Previous research by one of the authors showed that novice designers do not use sketching as a way to generate, develop and communicate design proposals, but move immediately to three-dimensional modelling. Neither do they generate multiple solutions.     

The influence of relative values of outside director stock options on firm strategic risk from a multiagent perspective

Prior work has examined the effects of absolute levels of outside director stock option grants on risk behavior without recognizing that relative stock option values could differentially affect risk taking. Drawing from the house money effect perspective, we extend this literature by examining how positive deviation from prior outside director option grants values influences firm strategic risk. Additionally we draw from the behavioral agency model and the power literature to develop a multiagent contingency framework suggesting the effect of positive director pay deviation depends on the incentives and power of CEOs reflected in CEO stock ownership and CEO duality, respectively. Our empirical results indicate positive pay deviation has a positive effect on firm risk taking while high ownership and duality independently and jointly weaken this base relationship. Copyright © 2013 John Wiley & Sons, Ltd.     

Dark tourism through the lens of attachment theory and domestic tourists

This study explores the factors that affect domestic tourist attachment to dark tourism destinations by developing a hybrid model using several methods, including structural equation modeling (SEM) and fuzzy analytical hierarchy process (FAHP), predicated on attachment theory. The study collected data from 60 tourism experts and 622 domestic tourists. The study found that tourist motivation, national identity, tourism impacts, and destination attachment are all crucial factors that explain domestic tourist behavior towards dark tourism. The results of the mediation analysis indicate that destination attachment mediates the relationship between tourist motivation, national identity, and negative tourism impact with tourist satisfaction. The FAHP results show that place identity has the highest influence while place dependence has the lowest influence in shaping domestic tourists' selection of dark tourist destinations. The study's findings provide valuable insights for tour operators and destination managers to meet domestic tourists' expectations of dark tourism, adding to the existing knowledge related to the factors that impact dark tourism.