Foreign output and price shocks and macroeconomic activity in Korea

This paper examines the effects of foreign output and price shocks on output and the price level in Korea. The framework is a nine variable VAR model which includes output, price level, interest rate, real exchange rate, money supply, government expenditures, government debt, and foreign output and price variables. Foreign output and price effects are evaluated through computation of variance decompositions and impulse response functions. The variance decompositions indicate significant effects of foreign output on domestic output and significant effects of foreign prices on domestic output and the price level. The impulse response functions indicate positive short-run effects of foreign output on domestic output but insignificant effects on the price level while foreign price shocks have significant negative effects on output and significant positive effects on the price level for approximately two years. The results indicate the importance of including foreign shock variables when modeling the Korean economy.     

An Expectancy Theory Model for Hotel Employee Motivation: Examining the Moderating Role of Communication Satisfaction

ABSTRACT

The study investigated the role of communication satisfaction as a moderator strengthening the effect of three components of the expectancy theory (expectancy, instrumentality, valence) on work motivation in a hotel setting. High and low communication satisfaction groups respond differently to expectancy, instrumentality, valence, and work motivation. Employees who are highly satisfied with communication respond more positively toward motivation components, and they are more likely to perform well in their job when they are motivated. However, a series of confirmatory factor analyses of metric invariance indicated that there is no significant difference in the moderating effect between high and low communication satisfaction groups. Communication should be managed collectively to motivate employees. Implications and suggestions for future research are provided to better explain the process of decision-making when hotel employees are motivated.     

A first-passage-time model under regime-switching market environment

In this paper, we suggest a first-passage-time model which can explain default probability and default correlation dynamics under stochastic market environment. We add a Markov regime-switching market condition to the first-passage-time model of Zhou [Zhou, C., 2001. An analysis of default correlations and multiple defaults. Review of Financial Studies 14, 555–576]. Using this model, we try to explain various relationship between default probability, default correlation, and market condition. We also suggest a valuation method for credit default swap (CDS) with (or without) counterparty default risk (CDR) and basket default swap under this model.Our numerical results provide us with several meaningful implications. First, default swap spread is higher in economic recession than in economic expansion across default swap maturity. Second, as the difference of asset return volatility between under bear market and under bull market increases, CDS spread increases regardless of maturity. Third, the bigger the intensity shifting from bull market to bear market, the higher the spread for both CDS without CDR and basket default swap.     

Designing an Alternative Public Pension Scheme: A Korean Case Study

The trends of ageing population and slow economic growth have become a major concern for public pension schemes with the defined benefit (DB) type. To mitigate the impact of this trend and secure long-term financial sustainability, several countries have recently adopted notional defined contribution (NDC) schemes. In this paper, we show how to apply an NDC scheme to the public pension system of Korea, arguably the fastest ageing country. In particular, we create a new pension system by combining the current Korean pension scheme and an NDC. Through simulations it is shown that the proposed scheme can reduce the financial instability caused by the changes in demographic and economic factors, while retaining the income redistribution component. We further consider applying a German-type automatic balancing mechanism to the proposed scheme, by using the average income to determine the return rate of the fund, to make it sustainable in the long term.     

Information Asymmetry and Corporate Cash Holdings

This study analyzes the effect of information asymmetry on corporate cash holdings. Using various measures of information asymmetry, this study shows that companies that operate in environments with higher information asymmetry have smaller cash holdings. This study continues to find a negative relationship between information asymmetry and corporate cash holdings from a battery of sensitivity analyses, including the tests using different regression methods and the difference‐in‐difference tests employing brokerage‐firm merger and closure events. On the whole, the results support the monitoring cost hypothesis of cash holdings over the investment opportunities hypothesis.     

Openness and Poverty in the Postwar United States

Recent trade theory suggests that freer trade can be the primary cause of the observed rise of poverty in the United States. The short-run dynamic relationships between openness and poverty are examined using the concept of Granger causality. That the ultimate source of rising poverty since 1973 is trade liberalization of the US economy cannot be rejected. The result is convincing when two subsamples (pre- and post-1973) are reestimated. These findings are at odds with the conventional model in which freer trade raises productivity and hence reduces the poverty rate, but appear consistent with some models in which openness raises poverty.     

Ethical Structures and Processes of Corporations Operating in Australia,Canada, and Sweden: A Longitudinal and Cross-Cultural Study

Based on the ‘Partnership Model of Corporate Ethics’ (Wood, 2002), this study examines the ethical structures and processes that are put in place by organizations to enhance the ethical business behavior of staff. The study examines the use of these structures and processes amongst the top companies in the three countries of Australia, Canada, and Sweden over two time periods (2001–2002 and 2005–2006). Subsequently, a combined comparative and longitudinal approach is applied in the study, which we contend is a unique approach in the area of business ethics. The findings of the study indicate that corporations operating in Sweden have utilized ethical structures and processes differently than their Canadian and/or Australian counterparts, and that in each culture the way that companies fashion their approach to business ethics appears congruent with their national cultural values. There does, however, appear to be a convergence of views within the organizations of each culture, as the Swedish companies appear to have been more influenced in 2005–2006 by an Anglo-Saxon business paradigm than they have been in the past.     

The Impact of Bilateral Free Trade Agreements on Bilateral Foreign Direct Investment among Developed Countries

Previous studies find that a trade treaty positively impacts foreign direct investment (FDI). But does a trade treaty always have positive effects on FDI? What is the effect of bilateral free trade agreement (FTA) on bilateral FDI among developed countries? Based on the Knowledge‐Capital model, I hypothesize that bilateral FTA has negative effects on bilateral FDI in developed–developed country pairs, but positive effects in developed–developing country pairs. To test this hypothesis empirically, I conduct the within estimator, the Difference‐in‐Difference estimator and the Arellano–Bond estimator with panel data of bilateral FTA and outward FDI in 30 OECD countries and 32 non‐OECD countries between 1982 and 2005. The result supports the hypothesis. The existence of bilateral FTA decreases bilateral FDI in the OECD–OECD country pairs but increases bilateral outward FDI in the OECD–non‐OECD country pairs. The finding of negative effects of bilateral FTA on FDI is robust to different country classifications by gross national income (GNI) per capita and secondary school enrolment. Hence, the results are consistent with what Carr et al. (2001) predicts about the effects of trade cost on FDI in developed–developed country pairs and in developed–developing country pairs.     

当代社会主义的历史方位与中国特色社会主义

本文认为 ,当代社会主义所处的历史方位 ,一方面在于它正处在与资本主义长期并存的时期 ;另一方面就其自身而言 ,则正处在“不发达”、“不完善”阶段。因此 ,中国特色社会主义 ,应当是一个既遵循马克思主义的基本原则 ,同时又立足中国国情 ,并把二者紧密结合起来的概念。