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141. How IP Rights Keep Markets Free

Author:
Jonathan M. Barnett
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
It is elementary that secure protection of property rights is a necessary precondition for efficient markets that drive economic growth. Yet this principle is not always recognized in the case of markets for intangible goods. Rather, intellectual property rights are often characterized as a monopoly franchise that stands at odds with free-market competition. Following this view, IP rights at best provide a justifiable means to incentivize innovation but are prone to abuse by incumbents seeking to block entrants. This standard narrative overlooks an inconvenient fact. As I show in a new book, Innovators, Firms, and Markets: The Organizational Logic of Intellectual Property, incumbents and other large firms in US technology markets have regularly advocated against stronger forms of patent protection and, in certain industries, have resisted patent protection entirely. This lobbying strategy poses a puzzle: Why would dominant firms resist the opportunity to operate under the umbrella of a legal monopoly? This policy memo analyzes the counterintuitive IP policy preferences of large technology firms and, in resolving this apparent anomaly, shows that patents tend to enhance competitive intensity by enabling idea-rich but capital-poor innovators to challenge idea-poor but capital-rich incumbents. Contrary to widespread assumptions, IP rights are far closer to the familiar property rights that support tangible goods markets rather than the monopoly grant to which they are often (and misleadingly) analogized. These insights, which are based on over a century’s worth of US innovation history, raise significant concerns about the IP-skeptical trajectory that policymakers have pursued since the mid-2000s.
Topic:
Markets, Intellectual Property/Copyright, Law, and Criminal Justice
Political Geography:
Global Focus

142. Directions of Innovation Policy: Contrasting Views of China and the US

Author:
Anna Jaguaribe and Kamila Aben Athar
Publication Date:
08-2021
Content Type:
Special Report
Institution:
Brazilian Center for International Relations (CEBRI)
Abstract:
At the 24th China Analysis Group Meeting, experts analyzed the contrasting views of innovation policies in China and in the United States. The 14th five-year plan continues most of the economic efforts that characterized the last decade while also challenging some certain well-established elements. Internet development is still the dominant focus, but we can also observe the shift towards a service-based economy and high investment in infrastructure. According to the participants, one of the most relevant differences between the US and China is the way non-state actors are connected to the national government. American innovation efforts heavily feature research groups and private corporations having an active role, while in China the government puts up barriers that distort the market and influence it more directly. The tension between the two countries is stronger than ever and the new Biden administration brings a new set of uncertainties to the table, but at the same time, both China and the US are heavily dependent on each other economically. China’s efforts to expand its influence worldwide by negotiating with multiple countries will most likely exacerbate the conflict and talks regarding a decoupling, which currently seems unlikable.
Topic:
Foreign Policy, Economics, Markets, Infrastructure, and Innovation
Political Geography:
China, Asia, and United States of America

143. Yemeni Border Markets: From Economic Incubator to Military Frontline

Author:
Ahmed Nagi
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
A string of border markets on Yemen’s northwestern border with Saudi Arabia turned the confluence of two countries’ peripheries into a center, gave rise to a distinct economic system, and bridged cross-border communities. The ongoing war in Yemen has either destroyed these markets or forced their closure. An end to the hostilities is unlikely to restore the status quo ante, owing to Saudi Arabia’s desire to establish a buffer zone. This would militarize the borderlands in perpetuity.
Topic:
Markets, Economy, Borders, and Military
Political Geography:
Yemen, Saudi Arabia, and Gulf Nations

144. Financial Markets and Social Media: Lessons From Information Security

Author:
Claudia Biancotti and Paolo Ciocca
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
On January 28, 2021, stocks in U.S.-based video game retailer GameStop Corp. reached an all-time high of $483. Two weeks earlier, they had been trading at $20. Two weeks later, they were down again, and a congressional hearing on the matter was underway in Washington. Wild swings are hardly uncommon in financial markets. This episode, however, had novel characteristics. In a recent report, the U. S. Securities and Exchange Commission states that “GameStop Corp and multiple other stocks experienced a dramatic increase in their share price in January 2021 as bullish sentiments of individual investors filled social media.” 1 Retail traders congregating on the Reddit platform were key in both price formation and the emergence of a “Main Street versus Wall Street” narrative around the stock.2 The influence of social media on financial markets is here to stay, as younger generations start saving and investing. This carries both opportunities and risks. Information sharing and discussion on internet platforms can improve market transparency and efficiency. On the other hand, social media platforms are known vehicles of disinformation and manipulation of human behavior. They could be weaponized by malicious actors, ranging from state-sponsored groups to crime syndicates, looking to compromise market integrity and financial stability. For liberal democracies with independent financial watchdogs, a complex policy challenge follows. In order to fight information operations, financial authorities will need to cooperate with intelligence communities and other relevant parts of executive branches. This requires rules that clearly define each party’s role and encourage reciprocal trust. In many jurisdictions, cybersecurity statutes provide a starting point. They are, however, limited in scope, only covering cooperation vis-& agrave;-vis traditional cyber attacks. In this paper, we argue that the model must evolve to help prevent or defend against malicious information operations.3 We highlight, as a first step, the importance of organizational modules that allow entities with different levels of access to classified information to work together to assess and inform responses to hostile operations.
Topic:
Security, Markets, Finance, and Social Media
Political Geography:
Global Focus and United States of America

145. Merger Review Regimes in the ASEAN Region and Case Analysis of Grab-Uber Merger

Author:
Yungshin Jang and Gu Sang Kang
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In 2018, the largest yet cross-border M&A deal between digital platforms in Southeast Asia was reached, namely the Grab-Uber M&A case. The local digital platform Grab consolidated the regional operations of San Francisco, California-based Uber, a development which had significant effects on competition and consumer welfares in the Southeast Asia digital market. The competition authorities in the region independently initiated their investigation and started to deliberate the merger case to determine the anti-competitive effects on their domestic market, and to decide whether this transaction should be restricted or approved. Even though the two merging and merged firms completed their transactions, each authority applied different logic and imposed different remedies in deciding the case. Authorities in some member states such as Singapore and the Philippines decided that the Grab-Uber merger was anti-competitive, while others such as Indonesia and Viet Nam considered the merger not anti-competitive. Upon this backdrop, this article reviews the competition policies and laws of four major ASEAN countries – Indonesia, Singapore, Viet Nam, and the Philippines – from institutional and legal perspectives, focusing on M&A review regimes. Then, we briefly introduce how these com-petition authorities decided on the Grab-Uber merger case, also analyzing the competition effects of the case on the ride-hailing market in the countries. Based on the analysis results, we propose overseas competition policies for Korea.
Topic:
Markets, Economy, Business, ASEAN, Economic Competition, and Mergers and Acquisitions
Political Geography:
Indonesia, South Korea, Vietnam, Philippines, and Singapore

146. Korea’s Strategy on Trade Agreements with Developing Countries in Africa and the Pacific Regions

Author:
Meeryung La
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
As the US-China trade conflict intensifies, high dependence on US and China has been pointed out as a potential risk to the Korean economy. This calls for trade policies including diversification of trading partners and the establishment of a new model for trade agreements suitable to such diversified partners. Meanwhile, the necessity for such policies grows as protectionism spreads globally and trade order changes after the Covid-19 pandemic. Africa and the Pacific (AP) regions, the main areas of interest in this report, have been excluded from Korea’s FTA network despite their high growth potential and strategic significance. Most countries in the AP regions are geographically distant from Korea and mostly underdeveloped, so we have approached the region only in terms of development cooperation. Currently, trade agreements and systems for trade and investment with AP countries are insufficient, and the size of economic cooperation with these countries remains small. However, Africa has high market potential, owing to various factors such as its high population growth, middle-class growth, and transition to digital economy, while the Pacific island countries have abundant fisheries and marine resources, and wield voting power in international organizations. In this regard, it is necessary to build the foundation for cooperation with AP countries in the mid-to-long term. Against this backdrop, this study seeks mid- to long-term strategies to promote trade cooperation with AP countries. First we consider introducing and expanding nonreciprocal arrangements for developing countries in the AP regions, as currently provided to United Nations-defined least developed countries. Then we consider introducing a reciprocal trade agreement, for example, an FTA. As a result, we found that it is necessary to introduce an FTA model suitable for developing countries in the AP regions instead of introducing further nonreciprocal agreements. Based on the results of the study, this paper proposes strategic directions for trade cooperation with the AP regions, and furthermore, provides policy suggestions that should be included in the agreement with those countries.
Topic:
Markets, Treaties and Agreements, Partnerships, Digital Economy, Economy, and Trade
Political Geography:
Africa, Asia, South Korea, and Asia-Pacific

147. Changes in the Regional Structure of China's Domestic Market and Implications

Author:
Jihyun Jung, Won Seok Choi, Hong Won Kim, and Joohye Kim
Publication Date:
08-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In response to intensifying conflict with the United States and the shock of Covid-19, China reinforced its strategy to expand domestic demand. China's domestic market is an important factor affecting Korea's exports and economic growth. Accordingly, a large body of research has been conducted in Korea on China's expansion policy and changes in its domestic market. However, most studies have analyzed changes in China's consumer market, import market and imported items, limiting the overall understanding of China's domestic economy. In addition, most studies on China's regional domestic market have analyzed the market segmented by region. Recognizing this gap, this study expanded the scope of analysis of the domestic market in China to the entire domestic final demand, and analyzed inter-regional trade relations and other economic relations based on an inter-regional input-output analysis, which has rarely been attempted in analyses of the Chinese domestic market. In addition, the changes in the regional structure of the Chinese import market and Korea's competitiveness were analyzed using Chinese trade statistics. In particular, by synthesizing the changes after the global financial crisis, a turning point in China's economic structure, we project future changes in the regional economic structure of China, which emphasizes the independence of its domestic economy. In addition, in the era of US-China conflict, the study aimed to select regional markets meaningful to Korea, and to present strategic directions toward China focusing on regional cooperation and approaches into the domestic market.
Topic:
Markets, Economy, Regional Economy, and Domestic Market
Political Geography:
China, Asia, and South Korea

148. Analysis of Determinants of Foreign Capital Flow: Focused on Interest Rate and Exchange

Author:
Deok Ryong Yoon, Wongho Song, and Jinhee Lee
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
As the linkage between domestic and foreign financial markets grows stronger, concerns have been raised about the inflow and outflow of foreign investment capital as a source of financial instability whenever the financial market becomes unstable. Considering that opening the capital market is not an option, it becomes essential to examine the determinants of foreign investment to maximize the benefits of foreign capital inflows and outflows for sound growth in the real sector as well as the financial sector. Accordingly, this study attempts to produce evidence-based policy implications by empirically analyzing the determinants of the inflow and outflow of foreign investment funds.
Topic:
Foreign Exchange, Markets, Capital Flows, Investment, and Interest Rates
Political Geography:
Global Focus

149. Cashing in: Turning challenges into opportunities when evaluating humanitarian cash assistance

Author:
Neil Dillon, Ruth McCormack, Amelie Sundberg, Samir Hafiz, Paul Harvey, and Gabrielle Smith
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
ALNAP: Active Learning Network for Accountability and Performance
Abstract:
The use of cash transfers in humanitarian action has implications for evaluative activity. On the one hand, the utility of some evaluations has been strengthened by the increased attention that has been paid to evaluating cash transfers, the agreement of common outcome indicators and the creation of value-for-money methodologies. On the other hand, the programming approaches that are increasingly common to cash assistance – such as multipurpose and unconditional transfers, linkages with social protection systems and the digitalisation of transfers in partnership with financial service providers – present particular challenges for understanding humanitarian outcomes, delineating response scope, analysing different operational models and analysing new data sources. This discussion paper explores the challenges faced when evaluating cash assistance based on research activities by ALNAP along with substantive inputs from CaLP drawing on their wider research, such as the State of the World's Cash 2020 Report.
Topic:
Humanitarian Aid, Markets, Partnerships, Public-Private Partnership, and Cash Transfers
Political Geography:
Global Focus

150. RCEP Is Not Enough: South Korea Also Needs to Join the CPTPP

Author:
Jeffrey J. Schott
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
The benefits of the Regional Comprehensive Economic Partnership (RCEP) for South Korea are limited and need to be supplemented by more comprehensive agreements that deepen Korea’s ties to strategic allies in the Asia-Pacific region. RCEP's most important achievement is its new regional content rule that will encourage deeper integration of supply chains across the 15 markets, a key benefit for Korean industries invested in the region. But Schott notes that the pact also has significant limitations. To complement RCEP, he recommends that South Korea move forward with two other trade negotiating priorities, membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and upgrading the Korea-US Free Trade Agreement (KORUS), the latter aimed at encouraging US reengagement in the Asia-Pacific integration pact.
Topic:
Markets, Treaties and Agreements, Partnerships, Regional Integration, and Economic Policy
Political Geography:
Asia and South Korea