Pandemic and employment: Evidence from COVID-19 in South Korea

Using two complementary approaches, this study examines the deterioration of the Korean labor market during the first 10 months of the global COVID-19 pandemic. Applying the synthetic control method, we first find that the COVID-19 outbreak has eliminated 1.1 million jobs (4.2% of nonfarm employment) nationwide in April 2020. However, a difference-in-differences approach shows that local variation in COVID-19 intensity, which captures the “regional” effect of the pandemic, explains only 9% of the national shock. The portion of the regional effect remains low until December. This is mainly because the nationwide fear and policies such as social distancing measures also have a “common” effect on local economies. Our findings suggest that the COVID-19 shock may last long in the labor market due to this common effect unless the risk of infection is completely eliminated.     

Broadband infrastructure and export growth

With the digital transformation of the economy and society, high-speed Internet is becoming an important supporting infrastructure for international trade activities. This study treats the pilot policy of the Broadband China strategy as a quasi-natural experiment and investigates the ways in which broadband infrastructure development affects export trade in Chinese cities. Empirical results show that export trade in the pilot cities increases by 6.82%–18.8% on average as a result of the Broadband China policy intervention. Our study shows that this policy can effectively promote the use of Internet facilities, and broadband infrastructure can significantly promote the growth of a city's export trade. Broadband infrastructure influences export trade through the direct channel of improving information efficiency, which in turn lowers logistics costs, promotes trade efficiency, and reduces barriers to trade. There is no significant regional heterogeneity and urban characteristics heterogeneity in the export trade effect. Although broadband infrastructure can affect exports through the indirect channels of industrial structure and technological innovation, the direct effect accounts for much of the total effect.     

Industrial policy and corporate investment efficiency

Drawing on the quasi-experiment formed by the revitalization plan of ten industries in China, this study empirically examines the impact of selective industrial policy on corporate investment efficiency within a difference-in-differences framework. The results show that the revitalization plan has a significant and negative effect on corporate investment efficiency by boosting over-investment while having little influence on under-investment. Further, we explore two potential channels underlying these findings, and find that the mediating effects of capital allocation efficiency and managerial overconfidence are significant. This study, therefore, demonstrates that the revitalization plan cannot effectively improve corporate investment efficiency, and has important implications for the use of selective industrial policy inside and outside China.