Unions and the adoption of high-performance work systems in Korea: moderating roles of firms' competitive strategies

An unresolved question about the relationship between union representation and the adoption of high-performance work systems (HPWSs) is which factors affect the roles of unions toward the HPWS adoption. Using data from a 2009 multi-industry survey of 301 Korean firms, the author empirically examines the impacts of unions on the adoption of HPWSs. From the strategic choice perspective, he focuses on the roles of firms’ competitive strategies regarding the unions’ behaviors toward the use of HPWSs. The results indicate that Korean unions are negatively associated with the adoption of HPWSs when employers choose to implement more comprehensive HPWSs. Evidence suggests, however, that employers’ differentiation strategies moderate the union's negative impacts even when the employers comprehensively use the HPWSs. It implies that the differentiation strategy is a key factor to resolve the conflicts between unions and employers concerning the adoption of HPWSs.     

Estimation of dynamic models with nonparametric simulated maximum likelihood

We propose an easy-to-implement simulated maximum likelihood estimator for dynamic models where no closed-form representation of the likelihood function is available. Our method can handle any simulable model without latent dynamics. Using simulated observations, we nonparametrically estimate the unknown density by kernel methods, and then construct a likelihood function that can be maximized. We prove that this nonparametric simulated maximum likelihood (NPSML) estimator is consistent and asymptotically efficient. The higher-order impact of simulations and kernel smoothing on the resulting estimator is also analyzed; in particular, it is shown that the NPSML does not suffer from the usual curse of dimensionality associated with kernel estimators. A simulation study shows good performance of the method when employed in the estimation of jump-diffusion models.     

Use Of Information Network And Organizational Productivity: Firm-Level Evidence In Korea

This paper studies the relationship between the use of various information networks and organizational productivity in Korean firms. To this end, first. the current firm-level usage panems of information networks are explained in the following network categories: (1) LAN (Local Area Network). (2) inter- and intra-firm networks, (3) various types of inter-firm networks, and (4) the Internet and intranet, Second, by deriving TFP (Total Factor Roductivity) from the baseline production function, which augments lT stock into otherwise standard one, the impact of various information networks is investigated. The results show that LAN, the Intemet and intranet have significant impacts on fm-level TFP, while inter-firm network does not. Also, the productivity of firm using the Internet is 8.5 percent higher than the firms using only LAN, and the productivity of firms using intranet is 43.6 percent higher than the firms using just the Internet.     

Popular Reaction to the Intervention by the IMF in the Korean Economic Crisis

The International Monetary Fund (IMF) has played an important role in restructuring the Korean economy over the past three years. Relying upon survey data collected in 1998 and 1999, we explore the role of the IMF in Korea as perceived by its citizens. In the eyes of the Korean people, the IMF helped their economy to recover from the crisis. However, those Koreans who experience a decline in their income are critical of the IMF's role in their economy. Finally, our analysis reveals that the generally pro-IMF orientation of most Korean people has little to do with their support for a market-oriented reform program.     

The effect of subsidy policies on the product quality improvement

This paper analyzes the effect of government subsidy policies on creating an incentive for domestic firms to improve their product quality before exporting to an outside market. The goal of the government is to minimize the time it takes to reach the appropriate product quality level at low costs. We simulate a dynamic profit maximization problem of the firm and derive the optimal path of the product quality development, then test the efficiency of the three types of subsidy methods: Constant Subsidy, Quality Matching Subsidy and Time-limited Subsidy methods. Our model yields a number of intriguing results: (i) not every subsidy methods guarantee product quality development, although the same amount is subsidized. (ii) the matching fund style subsidy is more efficient than providing constant amount of subsidy. (iii) Time-limited Subsidy improves product quality faster than the unlimited subsidy method. (iv) Time-limited Subsidy improves quality much faster than other methods with less subsidy cost. (v) there is an optimal combination between the subsidy and the time limits.     

Capital Market Openness and Output Volatility

In this paper, using data from 21 advanced and 81 developing countries during 1971–2010, we empirically examine the impact of capital market openness on output volatility. We find that opening of capital markets increases the output volatility of developing countries. Furthermore, we find that the main channel through which capital market openness increases volatility is currency and external‐debt crisis. Finally, we find that while Asian countries are less likely to experience a crisis, they become even more unstable than other developing countries once a crisis occurs. Our evidence strengthens the case for caution in developing countries' opening up of their capital markets.     

Upstream Market Power and Wasteful Retailers*

We provide a novel explanation for the wasteful product disposal by retailers. In our model, after purchasing a quantity of a product from the manufacturer, the retailer exerts a costly effort to sell the product to the final users. The manufacturer’s production cost and the outside opportunity associated with it is private information. We show that, when the manufacturer has the upstream market power, the retailer sells all units purchased from the manufacturer. However, when the retailer has the market power, it might deliberately purchase more than it sells to the final users (thus wasting the unsold amount).     

Technology Foresight Activities in Korea and in Countries Closing the Technology Gap

This article discusses technology foresight in selected countries which were politically dependent (colonial) before World War II and considered as “under-developed” in the post-war period. Most of them show considerable economic dynamism in the 1990s, which is not always based on their own scientific and technological capability. For this group of countries, national exercises in technology foresight are likely to be an important tool in planning the strategic direction for science and technology development in order to catch up economically as well as socially. In Korea, which has recently become an OECD member, comparative advantage based on factors such as low wages and protected industries are no longer effective as the economy is now wide open to the world. Foresight is being used to look at comparative advantages based on Korea’s own knowledge-creating activities. In southeast Asian countries, foresight is still in an infant stage, but most of these have medium-term planning cycles and have undertaken longer-term vision studies. In South Africa, a national foresight project is running, as is an adapting foresight process to make the large national research organization fit. In Latin America, an agenda has been set up which indicates the desire of several countries to engage in foresight activities using different approaches.     

Taxation and the asymmetric adjustment of selected retail energy prices in the UK

This paper investigates the adjustment of the prices of four key petroleum products in the UK following changes in the price of crude oil. We find significant evidence that the pre-tax prices of diesel, kerosene, and gas oil adjust more rapidly in an upward than a downward direction, but that the pre-tax price of unleaded petrol adjusts symmetrically. However, these patterns are obscured at the pump once one accounts for fuel duty and value-added tax, raising the possibility that firms can use the tax system to conceal rent-seeking behaviour.     

GRANTING AN EXIT OPTION TO CONDUCT AN AUDIT

We study a principal–agent relationship with auditing in which information from an audit is ‘soft’– by conducting an audit, the principal observes the agent's private information, but cannot obtain verifiable evidence on the information. Moreover, the principal's auditing effort is unverifiable in our model. Therefore, besides the agent's misreporting incentive, there is the principal's incentive to accuse the truthful agent even without auditing. If the principal's auditing effort is verifiable, granting no exit option to the agent is optimal although the principal can still accuse a truthful agent after the audit. We show that when the principal's auditing effort is unverifiable, granting an exit option to the agent and auditing are complementary. Without granting an exit option to the agent, no auditing is optimal, and the principal grants an exit option to conduct a sincere audit, which in turn mitigates the agent's misreporting incentive. Our analysis also reveals that, when the cost of auditing is sufficiently large, the principal conducts more sincere audits with a smaller amount of penalty.