The Finance-growth Relationship and the Level of Country Development

We examine whether dynamic impacts of banks and stock markets on economic growth are related to the level of country development. Using annual data from 15 industrial and 15 emerging countries over the period from 1976 to 2005, we find that banking development and stock market development may have distinct short-and long-run impacts on economic growth at various stages of country development. Financial development is not always a panacea for economic growth. Most importantly, our findings suggest that the fully functional tools to render stable growth for a country may depend on the level of the country’s development.     

Market overreaction and investment strategies

We investigated the overreaction of the Korean market in response to shocks in the US stock market, and analysed the dynamic relationship between these two markets since 1996. We found that the KOSPI 200 index futures overreacted to the S&P 500 index returns during the period from 2000 to 2009 when the Korean market was in its growth stage. As the Korean market matured and the KOSPI 200 overnight futures were introduced in 2009, the overreaction disappeared. When investors employed the Kelly model or Value-at-Risk to exploit the overreaction, their trading strategies produced significant profits during the growth stage even after considering transaction costs and risk, but the profits attenuated once the overnight futures market was launched in 2009.     

Can Singapore maintain its competitive edge in manufacturing productivity vis-à-vis China and Malaysia?

This article investigates whether Singapore can maintain its competitive advantage in manufacturing from a labour productivity perspective vis-avis China and Malaysia, which are generally viewed as Singapore's competitors in manufacturing. We also investigate the extent to which China is closing the labour productivity gap with Singapore and Malaysia in technology-intensive segments of manufacturing. Our analysis reveals that China has the potential to develop a high labour-productivity and low-wage manufacturing sector. In terms of manufacturing labour productivity, China is moving towards convergence with Malaysia. Compared with Singapore, China's manufacturing labour productivity is still far behind, especially in key technology-intensive industries like electronics and chemicals, such that it is unlikely for China to catch up with Singapore within a decade.     

JUMPING THE CURSE: EARLY CONTRACTING WITH PRIVATE INFORMATION IN UNIVERSITY ADMISSIONS*

This article introduces a new model of early contracting. Employers who have private information about the applicant's ability worry that applicants who accept their offer are precisely those who were not offered other jobs. To avoid this winner's curse, employers anticipate the time of contracting. The model is developed in the context of university admissions, and is shown to be consistent with several stylized facts in that “market.” We show that, in contrast to received wisdom, allocative efficiency may be improved by the presence of early contracting.     

The inflation rates may accelerate after all: panel evidence from 19 OECD economies

The stationarity of inflation has many important economic implications. Most panel-based empirical studies do not handle cross-sectional dependence, which will result in power distortion. This paper applies a nonlinear IV estimator to calculate the test statistic of panel unit root (Chang in J Econom 110:261–292, 2002), which accounts for general cross-sectional correlation. Using monthly inflation rates, two statistics proposed by Im et al. (J Econom 115:53–74, 2003) reject the unit root; however, the nonlinear IV statistic accepts the unit root. That is, the ignored cross-sectional correlation may lead to over-rejection of the unit root null. In a nutshell, unlike current literature, the inflation rates may accelerate after all.     

Long-run determinant of Korean economic growth: empirical evidence from manufacturing

This paper challenges the recent contrarian view that the phenomenal growth of East Asian NICs is fuelled mainly by the accumulation of production inputs not by TFP growth. To appraise this view, we investigated and re-evaluated South Korean manufacturing growth (1973(Q1)–1993(Q4)). Using Johansen's cointegrating analysis, our results show that South Korean manufacturing appears to have increasing returns to scale in production technology. The ‘learning by doing’ effect defined by Lucas (1988) is empirically supported. This effect appears to be observed as a long-run determinant of South Korean manufacturing growth. Consequently, South Korean manufacturing growth can be described by an endogenous economic growth model, such as the Lucas (1988) model, contradicting the contrarian view.     

How to manage the intensity of comparison in comparative advertising over time

Despite the popularity of comparative advertising (CA) over the past three decades, few studies have explored how to develop this strategy outside the USA. This study reports the results of experiments conducted in South Korea, a country where CA has rarely been used. Two hundred Korean college students were exposed to fictitious advertisements in which the independent variable of comparison intensity (non-comparative/low/medium/high/increasing) and exposure sequence (first/second/third) were manipulated. The dependent variables of attitude towards the brand and purchase interest assessed advertising effectiveness. Results suggest that the effectiveness of comparative advertising in Korea is improved by increasing the intensity of comparison gradually from indirect (low) to direct (high) over time.     

Structural effects of cognitive and affective reponses to web advertisements,website and brand attitudes,and purchase intentions: The case of casual-dining restaurants

This study investigates the structural relationships among responses to website advertisements, website attitudes, brand attitudes, and purchase intentions in the case of web advertisements for casual-dining restaurants. Responses toward advertising (Rad) factors were categorized as cognitive responses and affective responses. The SEM model in LISREL was used to examine the interrelationships among the proposed hypothesized constructs. Several empirical results were obtained. First, Rad had a positive effect on website attitudes. Second, website attitudes had a positive effect on brand attitudes. Third, brand attitudes had a positive effect on purchase intentions. Finally, some discussion and implications of the study are provided.