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Begin New Search Topic International Affairs Publishing Institution Korea Institute for International Economic Policy (KIEP)

1. The Effect of Restructuring on Labor Reallocation and Productivity Growth: An Estimation for Korea

Author:
Choi Hyelin, Kim Subin, and Jung Sung Chun
Publication Date:
09-2017
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Productivity is considered one of the most important factors for economic growth. Total productivity grows through technological progress or realloca-tion of resources. This paper analyses their contribution to economic growth for total economy and by sectors. The main finding is that economy-wide increases but this is mainly due to internal technological improvements. On the one hand, inter-sector reallocation of labor negatively contributes to eco-nomic growth as employment moves to service sectors with low productivity. Further, when looking at the sectoral-level productivity growth, both internal and external restructuring make positive contributions to aggregate economic growth. However, internal technological progress and reallocation of employment appear to similarly contribute to the sectoral-level economic growth in the manufacturing sector, whereas internal restructuring makes a larger contribution to economic growth in the service sector. This suggests that there is more room for reallocation of resources to contribute to the productivity growth in service sectors. Therefore, the productivity growth of the service sector would foster economy-wide productivity and it can be achieved by the mitigation of misallocation of resources in service sectors.
Topic:
International Political Economy and International Affairs
Political Geography:
Asia

2. Determinants and Consequences of Corporate Social Responsibility: Evidence from the Revision of the Company Act in India

Author:
Lee Woong
Publication Date:
04-2017
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
India is the first country to introduce mandatory CSR spending for eligible firms, based on the revision of the Companies Act in 2013. In this paper, I explore the effects of the revision of the Companies Act in India on the likelihood of a firm's CSR participation and its profit. It is the first work to investigate the effects of the provision of mandatory CSR. The results show that the revision increased the eligible firms' CSR incurrence by 2.3 percentage points, compared to ineligible firms. The findings also indicate that the revision is effective to increase the eligible firms' profits by 3.5 percent, compared to the ineligible firms. Therefore, I suggest that profit-maximizing CSR and private provision of public goods through mandatory CSR are valid in India.
Topic:
International Political Economy and International Affairs
Political Geography:
Asia

3. A New Measure of Inter-industry Distance and Its Application to the U.S. Regional Growth

Author:
Yoon Yeo Joon and Whang Un Jung
Publication Date:
12-2016
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
We propose a new measure of inter-industry ‘distance’. This is constructed a la Antras et al. (2012). While they measure the distance of an industry from its final use ？ what they call ‘downstreamness’ of an industry ？ we measure the distance between a pair of industries. Our proposed index is a measure of input-output linkages between industries that incorporates a ‘distance’ flavor. Our measure distinguishes the number of vertical production stages that an industry’s product goes through until it is finally used by another industry by assigning larger weights to the value of input use with longer production chains. Hence our measure contains more information on the relation between two industries along the vertical production chain. We use this index to construct an aggregate measure of ‘industry connectedness’ of regions in the U.S. It measures the degree of industrial linkages of a region. We then empirically establish that each region’s labor productivity is positively associated with the ‘industry connectedness’. The result contributes to the large literature of agglomeration economies that the industrial linkage is one of the main sources of agglomeration economies and productivity growth, as emphasized by Marshall (1920). It also suggests that our index can serve as an alternative measure of the industrial linkages.
Topic:
International Political Economy and International Affairs
Political Geography:
Global Focus

4. Comparative Advantage of Value Added in Exports: The Role of Offshoring and Transaction Costs

Author:
Park Soonchan
Publication Date:
10-2016
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study tests whether Ricardian comparative advantage is valid for value added in exports that does not include intermediate inputs imported from various industries in a number of countries. Using a panel data on valued added contents of bilateral exports, we find that changes in the labor productivity lead to growth of value added in exports. This implies that Ricardian comparative advantage is an important determinant of exports in longitudinal changes. The estimated coefficients of the observed productivity turn out to be larger than those of CDK (2012), implying that Ricardian comparative advantage has greater influence on determining the patterns of trade in a world with global value chains.
Topic:
International Affairs
Political Geography:
Global Focus

5. The Effect of Exchange Rate Volatility on Productivity of Korean Manufacturing Plants: Market Average Rate Regime vs Free Floating

Author:
Pyun Ju Hyun
Publication Date:
10-2016
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study examines how exchange rate volatility can influence total factor productivity (TFP) in various dimensions. Using Korean manufacturing plant-level data for 1990-2007, we first compare and contrast the effects of exchange rate volatility on TFPs between two different exchange rate regimes―pegged and free floating. We find that the exchange rate volatility had a negative effect on productivity in both regimes but this negative effect was greater during the period when exchange rate fluctuation was restricted, compared to the period with free floating rate. We also find that the negative effects of the volatility on productivity were heterogeneous over TFP quantiles and exhibited an inverted W-shape curve. In particular, the negative effects were more pronounced for exporting plants that had the lowest or highest TFPs.
Topic:
International Affairs
Political Geography:
Global Markets