Ties Binding Asia,Europe and the USA

We investigate changes in Asia's regional and global trade linkages and their influence on macroeconomic relationships among Asia, Europe and the USA. We first document changes in tripartite trade patterns and discuss stylized facts about East Asia's trade structure, with particular focus on the role of China. China plays a critical role in the rapidly expanding intra‐Asian trade as an assembly and production center that supplies final goods for the advanced economies. However, China's trade shares in final goods with East Asia and in parts and components with Europe and the USA are rising, suggesting that the region's production chains are becoming increasingly integrated into the global business network. Empirical results from a panel vector autoregression model generally confirm increasingly mutual macroeconomic interdependence among East Asia, Europe and the USA. The findings suggest a future role for Asia as an important trade partner and balancing power in the world economy.     

Glass ceiling or sticky floor? Evidence from a distributional approach of the gender wage gap among PhD holders in South Korea

This study examines the gender wage gap, to explore whether a glass ceiling (large unexplained wage gaps in the upper percentiles) or sticky floor (large unexplained wage gaps in the lower percentiles) exists in the wage distribution of the most educated Koreans. This study focuses on seeking these distributional patterns for a theoretically homogeneous gender group, relying on a smaller dataset of PhD holders. Counterfactual methods combining recentered influence function decomposition with propensity score matching allow us to estimate how the wage gap between statistically similarly matched males and females, varies across the unconditional wage distribution. There is evidence of a strong sticky floor and a limited glass ceiling among Korean PhD holders. Results show that a negative relationship between a high level of education and the gender wage gap cannot be taken for granted, at least in South Korea. Even female PhD holders suffer from gender discrimination, especially when they are at the bottom end of the wage distribution.     

The Effects of Oil Price on the Korean Economy: A Global VAR Approach

This article empirically explores the effects of oil price on the Korean economy using a Global VAR model. First, we evaluate the average connectedness of oil price with the Korean domestic variables over the precrisis period. We then investigate the time-varying contribution of oil price to the Korean financial and real sectors during and after the global financial crisis through recursive estimation. It is found that the contribution of oil price becomes very large in the case of real exports, equity prices, and real output, but plays a much less prevalent role in the remaining cases. In the meantime, the time-varying contribution of oil price to the Korean economy has not changed during and after the global financial crisis. Interestingly, we find that the Korean economy is affected mostly by overseas financial conditions in the short-term but it becomes more susceptible to oil price fluctuations in the long run, suggesting that Korea’s reliance on energy imports leaves the economy exposed to volatility in energy prices.     

Resource abundance and economic growth in China

This paper revisits the resource curse phenomenon in China and differs from the previous studies in four respects: (i) City-level data is used; (ii) A spatial variable is constructed to estimate the diffusion effect of natural resources among cities in the same province; (iii) The impact of resource abundance on economic development is investigated not only at the city level but also at the prefectural level in China; (iv) We use a functional coefficient regression model to deal with city-specific heterogeneity and, at the same time, analyze the transmission mechanism of the resource curse phenomenon. Our empirical results show that there is no significant evidence to support the existence of a resource curse phenomenon in China. On the other hand, we find that the degree of natural resource abundance in a city has a positive diffusion effect on the economic growth of neighboring cities within the same province at the city level, but not at prefectural levels. We attribute this to the urban bias policy.     

Credit Rating and Monetary Policy Transmission to Equity Markets: Evidence from the Emerging Market

This study empirically estimates credit channel of the monetary policy and corporate stock return using daily stock return data including the sample with non-financial firms listed in Korea stock exchange (KOSPI). Empirical results support that changes in the basis rate turn out to increase equity returns in case of the firms with higher credit rating compared to the previous year. The estimation results confirm the conjecture that monetary policy has a significant impact on stock market through the channel of changes in credit rating.     

Measuring living standards from the lowest: Height of the male Hangryu deceased in colonial Korea

The living standards in Korea during the colonial period (1910–1945) have been debated for a long time. We explored this problem using the height of the Hangryu deceased, a dead person who did not have any acquaintances to claim the body. We found that the height of male Hangryu deceased, ages 25 to 30, increased by 2.2 cm during the colonial period. This result is consistent with recent quantitative studies measuring income levels or demographic information. However, questions such as when this growth in height started and what initiated this pattern need further investigation.     

Simulating the Effects of Railroad Mergers

The purpose of this paper is to add to the empirical literature regarding merger simulation analysis by examining the effect of railroad mergers on railroad market power. This is done by measuring railroad profits and revenue/variable cost ratios corresponding to different degrees of intrarailroad competition for movements of Kansas export wheat to Houston, Texas. Two models are developed to achieve the objectives of the study. A network model of the wheat logistics system is used to identify the least cost transportation routes from the Kansas study area to the market at Houston. A profit improvement algorithm, which identifies Nash equilibrium prices, is developed to measure the amount by which railroads can profitably raise their prices above variable cost. The results of the study have implications for U.S. railroad merger policy. The paper indicates that railroad mergers do not necessarily increase railroad market power or make railroad shippers worse off. Instead, the study demonstrates that the impact of railroad mergers on shippers and railroads depends on factors that vary geographically, such as the degree of intrarailroad and intermodal competition in the area.     

Effects of a holiday trip on health and quality of life: evidence from a natural experiment in South Korea

We examine whether having a holiday trip affects an individual’s well-being, namely quality of life, health status, stress level and health behaviours. We use the two-stage estimation method to control for endogeneity of a travel experience, exploiting a natural experiment of distributing Travel Vouchers at random among qualified applicants in South Korea in 2012. We find that, for applicants whose decision to travel is influenced by receiving a voucher, a travel experience has no significant effects on the traveller’s well-being measured 3–12 months later. We also find that the OLS estimates overstate benefits of a travel.