The demographic cycle and optimal schooling choices

A model is developed that enables the authors to estimate the effects of demographic cycles on both earnings and schooling. The model is tested using data from the 1991 Korean Occupational Wage Survey. The results indicate that cohorts following large birth cohorts in the cycle choose relatively less formal schooling compared to pre-peak cohorts, and that post-peak cohorts also have lower incomes. This result concerning South Korea is consistent with findings from previous studies concerning the United States.     

A day without a search engine: an experimental study of online and offline searches

With the evolution of the Web and development of web-based search engines, online searching has become a common method for obtaining information. Given this popularity, the question arises as to how much time people save by using search engines for their information needs compared to offline sources, as well as how online searching affects both search experiences and search outcomes. Using a random sample of queries from a major search engine and a sample of reference questions from the Internet Public Library (IPL), we conduct a real-effort experiment to compare online and offline search experiences and outcomes. We find that participants are significantly more likely to find an answer on the Web (100 %), compared to offline searching (between 87 % and 90 %). Restricting our analysis to the set of questions in which participants find answers in both treatments, a Web search takes on average 7 (9) minutes, whereas the corresponding offline search takes 22 (19) minutes for a search-engine (IPL) question. Furthermore, while raters judge library sources to be significantly more trustworthy and authoritative than the corresponding Web sources, they judge Web sources as significantly more relevant. Balancing all factors, we find that the overall source quality is not significantly different between the two treatments for the set of search-engine questions. However, for IPL questions, we find that non-Web sources are judged to have significantly higher overall quality than the corresponding Web sources. In comparison, for factual questions, Web search results are significantly more likely to be correct (66 % vs. 43 %). Lastly, post-search questionnaires reveal that participants find online searching more enjoyable than offline searching.     

Effects of government spending shocks in China,Japan, and Korea

ABSTRACT

This study investigates the effects of government spending shocks on various key macro variables in China, Korea, and Japan using structural VAR models. The main empirical findings are as follows. Government spending multipliers of all three countries are far larger than 1 in recent years. The effectiveness of fiscal expansion has not changed markedly in China but substantially increased in Korea (after the Asian financial crisis) and Japan (during zero lower bound period). Increases in the effectiveness of fiscal expansion are associated with changes in the monetary and exchange rate policy regimes and institutions of these countries. Among the three countries, the government spending multiplier is relatively large in China but relatively small in Japan in recent years. Although the effects on exchange rate and trade balance vary across countries and sample periods, real exchange rate tends to depreciate, whereas trade balance tends to improve under flexible exchange rate regimes. Some empirical findings are consistent with standard theory, but others are not.

Abbreviations: NK: New Keynesian VAR: Vector Autoregressive ZLB: Zero Lower Bound     

How technological innovation affects the structure of an industry: entrepreneurship evolution in the biotechnology and pharmaceutical industry since 1980

Challenges faced by the biotechnology and pharmaceutical industry, including reduced R&D productivity and the expiration of drugs that are high in demand, are recently being addressed through technological innovation. Such innovations are highly likely to change the structure and functioning of the industry. Since 2000, biotechnology and pharmaceutical companies have actively made strategic alliance, and technological innovations have changed the source of innovation from R&D to entrepreneurship within the industry. In this study, we identify the evolution of entrepreneurship and discuss the changes caused by technological advancements since 1980 by analysing patterns of exporting and acquiring technology data from Medtrack. Over difference period, biopharmaceutical firms have gained new knowledge and improved technology, and have implemented this newly acquired knowledge and innovation to introduce drugs to the market.     

Relationship between management ownership and firm value among the business group affiliated firms in Korea

In this paper, we revisit an old issue on the relation between management ownership and firm’s value. The Korean panel data on the business group firms, allows us to compute ownership right and control right separately for each business group affiliated firm. Our measures are different from the similar measures on the Korean firms as in Baek et al. (2004) or Joh (2003). Rather than confounding the two offsetting effects, this paper tests convergence of interest hypothesis and entrenchment hypothesis separately. Empirical findings show that, given control right, there is no clear-cut relation between firm value and the inside management ownership for most firms with the inside management ownership less than 42%, that there is a positive relation between firm value and the inside management ownership for those firms with the inside management ownership higher than 42%, and that, given ownership right, profitability decreases as control right increases.     

The scope of “marketing” research in the nonprofit sector: Lessons from the last 20 years literature

Over the last several decades, the field of nonprofit marketing has produced a growing number of publications; however, little attention has been paid to examine what research topics have been studied by nonprofit scholars from the marketing perspectives. This knowledge production research contributes to the literature by reviewing trends in research themes and methodologies over the last 20 years among the articles for which authors use the terminology “marketing.” Employing a thematic review using text network analysis, and an in-depth methodology review, this study finds that nonprofit marketing studies have been shifting to become more subdivided and diversified in terms of research themes and methodologies. However, we also find that there is still room for further development, which we provided recommendations based on the findings. With its findings, this paper provides critical guidance for future studies.     

Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis

Abstract

This paper examines the performance of banks, domestic and foreign, in Korea before and after the Asian financial crisis, examining how the profitability of those banks differed and identifying factors that explain why those differences existed. The performance of Korean banks deteriorated dramatically in 1998 with most banks recovering somewhat in 1999. Foreign banks did not experience the same negative effect on their performance as a rule. Overall, the domestic Korean banks suffered more severely from the Asian financial crisis than foreign banks. Several possible explanations exist. First, foreign banks, unlike domestic Korean banks, were not subject to credit allocation directives from the Korean government to selected, favoured industries. Second, foreign banks, since they relied for governance on the mother bank in the home country, achieved higher efficiency and better asset and liability management. Finally, foreign banks rely more heavily on fee-for-service income rather than loan revenue.     

A reduced PDE method for European option pricing under multi-scale,multi-factor stochastic volatility

The number of tailor-made hybrid structured products has risen more prominently to fit each investor’s preferences and requirements as they become more diversified. The structured products entail synthetic derivatives such as combinations of bonds and/or stocks conditional on how they are backed up by underlying securities, stochastic volatility, stochastic interest rates or exchanges rates. The complexity of these multi-asset structures yields lots of difficulties of pricing the products. Because of the complexity, Monte-Carlo simulation is a possible choice to price them but it may not produce stable Greeks leading to a trouble in hedging against risks. In this light, it is desirable to use partial differential equations with relevant analytic and numerical techniques. Even if the partial differential equation method would generate stable security prices and Greeks for single asset options, however, it may result in the curse of dimensionality when pricing multi-asset derivatives. In this study, we make the best use of multi-scale nature of stochastic volatility to lift the curse of dimensionality for up to three asset cases. Also, we present a transformation formula by which the pricing group parameters required for the multi-asset options in illiquid market can be calculated from the underlying market parameters.     

Multinational banking and the international transmission of financial shocks: Evidence from foreign bank subsidiaries

Using bank-level data on 368 foreign subsidiaries of 68 multinational banks in 47 emerging economies during 1994–2008, we present consistent evidence that internal capital markets in multinational banking contribute to the transmission of financial shocks from parent banks to foreign subsidiaries. We find that internal capital markets transmit favorable and adverse shocks by affecting subsidiaries’ reliance on their own internal funds for lending. We also find that the transmission of financial shocks varies across types of shocks; is strongest among subsidiaries in Central and Eastern Europe, followed by Asia and Latin America; is global rather than regional; and becomes more conspicuous in recent years. We also explore various conditions under which the international transmission of financial shocks via internal capital markets in multinational banking is stronger, including the subsidiaries’ reliance on funds from their parent bank, the subsidiaries’ entry mode, and the capital account openness and banking market structure in host countries.     

The effect of pre-flight attendants’ emotional intelligence,emotional labor,and emotional exhaustion on commitment to customer service

Previous studies have shown that the success of airlines depends heavily on the quality of in-flight services provided by flight attendants. The performance of flight attendants is primarily based on their emotional intelligence (EI). Thus, airlines endeavor to recruit flight attendants with high EI and also conduct continuous EI training even after their recruitment. To meet the demand of excellent flight attendants, a number of universities and colleges have established airline service programs. This study examines the relationships among EI, emotional labor (EL), emotional exhaustion (EE), and commitment to customer service (CCS) among pre-flight attendants in the undergraduate airline service programs. The results of the study revealed that the better pre-flight attendants understand their emotions and use them appropriately, the more they display their true emotions and modify their bad feelings to desirable emotions required for effective in-flight customer services. Also, the more pre-flight attendants employ EL, the more exhausted they are emotionally. As the first study on pre-flight attendants’ EI, this study contributes to the existing body of knowledge on EI, EL, EE, and CCS. The findings of the study also provide practical implications that effective assessment and education of EI by university-based airline service programs can contribute to service excellence of airlines.