The Effects of Trading Methods on Volatility and Liquidity: Evidence from the Taiwan Stock Exchange

This study contrasts the call and continuous auction methods using Taiwan Stock Exchange data. Volatility under the call market method is approximately one-half of that under the continuous auction method. The call market method is more effective in reducing the volatility of high-volume stocks than low-volume stocks. This contradicts conventional wisdom which suggests that the call market method is superior for thinly traded stocks, while the continuous auction method is preferred for heavily traded stocks. The call market method does not impair liquidity and price discovery. The call market appears more efficient than in the continuous auction market.     

Fiscal policy in Korea: Before and after the financial crisis

This paper examines the role of fiscal policy in the Korean financial crisis and the subsequent recovery from it. We specifically address three questions: Was Korea’s fiscal policy prior to the crisis conservative, or were there large hidden contingent liabilities not captured in the official budget balance? What were the main characteristics of fiscal policy in stimulating and restructuring the economy under the IMF stabilization program in Korea? How effective were the financial guarantee and public investment programs as part of the counter-cyclical fiscal policy in the recovery process from the crisis? To address these questions, we re-estimate the consolidated budget deficits in Korea by incorporating the quasi-fiscal activities of public funds and public enterprises using their micro balance-sheet data from 1972 to 2003.     

FISCAL MULTIPLIERS DURING THE GLOBAL FINANCIAL CRISIS: FISCAL AND MONETARY INTERACTION MATTERS

This study investigates the fiscal multipliers of 21 Organization for Economic Co‐operation and Development countries during the global financial crisis using panel vector auto regression methodology. Our findings suggest that the 1‐year fiscal multiplier was greater than 1 during the crisis, whereas it was less than 1 before the crisis because of different fiscal and monetary interactions. The combination of expansionary monetary and fiscal policies during the crisis boosted gross domestic product more effectively through internal and external transmissions: investment crowding‐out was limited, and net exports were spurred by the policy interaction. In addition, our results are robust to various specifications. (JEL E61, E63, E65)     

Revenue-sharing contracts across an extended supply chain

Revenue-sharing contracts have been heavily researched and promoted in the academic literature. However, despite some well-documented examples (e.g., the way Blockbuster and film studios were able to increase availability of the latest video releases in rental shops through a revenue-sharing contract), they seem to be much less prevalent in practice. A possible reason for this gap between theory and practice is that most academic research has focused on two-party contracts involving only one buyer and one supplier, while in reality, most supply chains consist of multiple stages. When there are several stages in the chain—as is the case for many extended, global supply chains—the traditional revenue-sharing contract is no longer optimal for the two contracting parties, as every other participant in the chain is able to leverage the revenue-sharing contract to its own advantage. Put another way, a revenue-sharing contract between only two parties is not incentive-compatible across all participants. Accordingly, we suggest that a revenue-sharing contract should involve all the supply chain partners, and propose a spanning revenue-sharing contract that accomplishes coordination and incentive-compatibility across the same.     

Developing an effective deep support network for individual investors

Providing investment research to meet the needs of the growing number of individual retail investors is an important opportunity. The broad variation in current stock research performance challenges investors to evaluate and select stock research. Evaluating stock research is difficult because developing stock research is a difficult and complex task. The research is largely an expression of the tacit knowledge of the analysts. This paper presents the concept, an effective deep support network to aid investors. An effective deep support network provides appropriate information from various providers that can be customisable and empowering to the individual investors. It allows them to incorporate their own judgment and to learn through experience. By meeting the real needs of retail investors, an effective deep support network could provide a competitive advantage for firms in financial services especially stock research firms.     

Dynamic change of corporate environmental strategy: rhetoric and reality

Although rhetoric involves political and symbolic posture, and does not always accurately represent reality, it plays an important role in the dynamic change process of environmental strategy. We first elaborate on the related concepts and develop frameworks to analyze corporate environmental strategy and its change. We report two case studies of Korean companies using the framework. Longitudinal case studies also provide additional implications for corporate environmental strategy in developing countries such as Korea. There is a gap between the rhetoric and reality of environmental strategy and it constantly changes over time depending on specific internal and external influences. The strength of external influences is a factor that determines whether the change is real or merely rhetorical. Internal organizational variables most likely affect the reality of environmental strategy. We show that the elaboration of rhetorical and realistic aspects of corporate environmentalism can bring out deeper insights and new theoretical developments. Copyright © 2003 John Wiley & Sons, Ltd. and ERP Environment     

Review of consumer activism in Korea, 1910–1995: A political-economic approach

Consumer activism in Korea has a long history, starting from an anticolonial social movement and developing into one which targets consumers' interests at both individual and societal levels. As a social movement, consumer activism needs to be understood within a political and economic environment, particularly in Korea which has gone through dynamic changes both politically and economically. While understanding of the political environment sheds further light on governmental consumer policies as well as manifested consumer activism, eminent consumer problems and issues were acknowledged according to the stage of economic development. This political-economic approach deepens our understanding of the Korean consumer movement and provides a framework for analyzing consumer activism in other Eastern Asian countries which are experiencing similar political or economic developments.

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Überblick über Verbraucheraktivismus in Korea von 1910 bis 1995: ein politischökonomischer Ansatz

Zusammenfassung Verbraucheraktivismus hat in Korea eine lange Geschichte, die als soziale antikolonialistische Bewegung begann und sich zu einer Bewegung entwickelt, die die Interessen der Verbraucher sowohl auf individueller Ebene wie auch auf gesellschaftlicher Ebene im Visier hat. Als soziale Bewegung muß Verbraucheraktivismus in einem politischen und ökonomischen Umfeld gesehen werden, insbesondere in einem Land wie Korea, das große politische und ökonomische Umwälzungen durchlaufen hat. Während ein Verständnis der politischen Umstände Erkenntnisse über staatliche Verbraucherpolitik, aber auch über sonstige Verbraucheraktivitäten, ermöglicht, ist es der Stand der wirtschaftlichen Entwicklung, der darüber bestimmt, welche Verbraucherprobleme und -themen in den Vordergrund rücken. Dieser kombinierte politisch-ökonomische Ansatz ermöglicht ein vertieftes Verständnis der koreanischen Verbraucherbewegung und bietet auch einen Bezugsrahmen für die Analyse der Verbraucheraktivitäten in anderen ostasiatischen Ländern, die eine ähnliche politische und ökonomische Entwicklung wie Korea erleben.

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Kee-Choon Rhee is a Professor in the Department of Consumer & Child Studies, the Seoul National University, Seoul, Korea 151–741. Jinkook Lee is an Assistant Professor of Retail & Consumer Science, University of Tennessee, 1215 West Cumberland Avenue, Knoxville, Tennessee 37996-1900, U.S.A.The uthors thank Robert N. Mayer, Robert O. Herrmann, and Loren V. Geistfeld for their insightful comments.     

The equilibrium price of futures contracts: A result drawn from capital asset pricing model

A recent study shows that separation theorems in the stock and forward market literatures may not hold in an integrated financial market; therefore, the securities market may influence futures trading. This article investigates the securities market influence on the futures price. The result shows that although the futures price incorporates the investor's expectation about the future spot price, it generally is not a best estimate of the spot price. In addition, it is shown that the speculative activity can destabilize the cash market for some commodities, if initially, the underlying cash price is highly volatile.     

Short sales and speed of price adjustment: Evidence from the Hong Kong stock market

We present empirical evidence that short sales contribute to market efficiency by increasing the speed of price adjustment to not only private/public firm-specific information but also market-wide information. Shortable stocks are characterized by weaker trade continuity and stronger quote reversals. They adjust faster to new information than non-shortable counterparts. These findings remain robust even in an “up” market condition in which short sales are not binding. The amount of information incorporated in each trade is also significantly higher for shortable than non-shortable stocks in both “up” and “down” market conditions. After controlling for firm size, trading volume, liquidity, price and option trading, short sales stand out as one of the significant factors that speed up the price adjustment.