Meeting the Social Policy Challenges Facing Korea

Korea faces the fastest population aging among Organisation for Economic Cooperation and Development countries and increasing levels of income inequality and relative poverty. While economic growth will help address these challenges, growth alone is not sufficient, making it necessary to introduce policies to promote social cohesion. First, the National Pension Scheme and the National Health Insurance need to be improved. Second, Korea should develop well‐targeted social programs and expand the earned income tax credit. Third, it is important to reduce labor market dualism, a major cause of inequality due to the large wage gap between regular and non‐regular workers. Fourth, education reform is needed to lower the financial burden of tertiary education, reduce the heavy reliance on hagwon and increase spending on preprimary education. At the same time, it is essential to maintain a sound fiscal position by increasing tax revenues, primarily through indirect taxes and environmental taxes, to cover rising social spending.     

Female income and the divorce decision: evidence from micro data

Escalating divorce rates during the 1960s and 1970s led to large numbers of academic investigations into the causes of divorce. Most of these studies concentrated on a significant increase in female income that resulted from rising female labour force participation rates. The difficulty with quantifying these arguments is that it is possible to observe the income of married females or it is possible to observe the income of divorced females, but it is not possible to observe both outcomes, simultaneously. This research attempts to resolve these difficulties by using sample selection techniques to correct for possible bias from simple observation of the income of married and divorced females.     

Are developed country multilateral tariff reductions necessarily beneficial for the U.S.?

Since the formation of the GATT in 1947, the belief underlying U.S. participation in GATT multilateral tariff reductions has been that they are beneficial to the U.S. This paper reports general equilibrium computations of the welfare effects of a 50% multilateral tariff reduction among developed countries using a seven region world trade model due to Whalley (1982).     

The Reality of the Present and the Challenge of the Future: J. Fagg Foster for the Twenty-First Century

This paper revisits J. Fagg Foster’s early assessment of the relevance of John Maynard Keynes’s theory of institutional economics. In his view, neither institutionalists nor most of Keynes’s followers really recognized the importance of Keynes’s theoretical insights. I examine Foster’s views on economic theory, with a particular focus on monetary theory. I apply Foster’s approach to what is now called modern money theory, an approach developed by heterodox economists working in the institutionalist and post-Keynesian traditions. I argue that this approach is consistent with Foster’s, and it offers a way forward to policy formation for the twenty-first century.     

The Effect of Terrorist Incidents on Capital Flows

Previous work has shown that terrorism has significant negative impact on countries' economies. We explore this relationship in more detail. Using an unbalanced panel of more than 160 countries for up to 25 years and the Global Terrorism Database (GTD) we show a decrease in foreign direct investment (FDI) as a consequence of terrorism. We also find evidence that FDI flows are more sensitive to terrorism than either portfolio investments or external debt flows. Finally, we test the hypothesis that terrorism has negative spill‐over effects on FDI flows into neighboring countries and find evidence that cultural, but not geographical, closeness matters.     

Advertising Effectively Influences Older Users: How Field Experiments Can Improve Measurement and Targeting

Does advertising measurably affect sales? New technologies for tracking individuals’ sales and ad exposure facilitate studying a nationwide retailer’s online brand advertising effectiveness. A controlled experiment on 1,577,256 existing customers measures the causal effect of advertising on purchases, overcoming the attribution problem by exogenously varying ad exposure. The advertising produced a statistically and economically significant effect on in-store sales. The experiment permits a demographic breakdown. Surprisingly, the effects are large for the elderly. Customers aged 65+, comprising only 5 % of customers, increased purchases by 20 % due to the advertising. This represented 40 % of the total effect among all ages.     

Methodology in business ethics research: A review and critical assessment

Using 94 published empirical articles in academic journals as a data base, this paper provides a critical review of the methodology employed in the study of ethical beliefs and behavior of organizational members. The review revealed that full methodological detail was provided in less than one half of the articles. Further, the majority of empirical research articles expressed no concern for the reliability or validity of measures, were characterized by low response rates, used convenience samples, and did not offer a theoretic framework, hypotheses, or a definition of ethics. Several recommendations, including a reviewer rating form addressing methodological decisions and inclusion of methodologists on the review panel, are offered to improve methodological rigor in published ethics research. Donna M. Randall is an Associate Professor in Management and Systems at Washington State University. Her research interests include organizational commitment, media coverage of whitecollar and corporate crime, and ethical issues in management. Her publications have appeared in such journals as Decision Sciences, Academy of Management Review, and Social Science Quarterly.Annetta M. Gibson is a doctoral student in accounting in the Department of Accounting and Business Law at Washington State University. She has a CPA and has worked as an auditor for a number of years. Her research interests include impression management and ethical issues in auditing, accounting, and management.     

EXCHANGEABLE DEBT CALLS AND SECURITY RETURNS

Exchangeable calls are not convertible into the calling firm's common stock but into the common stock of a target firm in which the calling firm has an ownership position. In addition to reducing leverage, exchangeables change the asset composition of the calling firm through the divestiture of the calling firm's ownership stake in the target firm. In contrast to the evidence on convertible calls, our findings indicate that announcements of exchangeable debt calls are not associated with an abnormal capital loss for the calling firm shareholders. For target firms, announcements of exchangeable calls reduce shareholder wealth. A lower probability of takeover resulting from diffusion of ownership concentration of the target firm's common stock may contribute to this result.