Pub Date : 2023-01-02DOI: 10.1080/1226508X.2023.2171458
Hyun-jung Nam, Y. An
ABSTRACT This study examines whether the cost of debt decreases when a banker interlocking director sits on the boards and exists within interlocking directors' network using a panel dataset during the period from 1998 to 2014. This study finds that the interlocking directors' network in Korea has gradually increased each year, and Korean firms' cost of debt is reduced when a banker interlocking director is participating on the boards and within interlocking directors' network. Specifically, Chaebols more strategically use a banker interlocking directors to lower the cost of debt than non-Chaebols. This result suggests that a banker interlocking director on boards with a strong firm network alleviates the burden of the cost of debt.
{"title":"Interlocking Network, Banker Interlocking Director and Cost of Debt","authors":"Hyun-jung Nam, Y. An","doi":"10.1080/1226508X.2023.2171458","DOIUrl":"https://doi.org/10.1080/1226508X.2023.2171458","url":null,"abstract":"ABSTRACT This study examines whether the cost of debt decreases when a banker interlocking director sits on the boards and exists within interlocking directors' network using a panel dataset during the period from 1998 to 2014. This study finds that the interlocking directors' network in Korea has gradually increased each year, and Korean firms' cost of debt is reduced when a banker interlocking director is participating on the boards and within interlocking directors' network. Specifically, Chaebols more strategically use a banker interlocking directors to lower the cost of debt than non-Chaebols. This result suggests that a banker interlocking director on boards with a strong firm network alleviates the burden of the cost of debt.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"34 1","pages":"71 - 92"},"PeriodicalIF":1.7,"publicationDate":"2023-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78880039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-01-02DOI: 10.1080/1226508X.2023.2166973
Xiaohong Yu, Maonan Chen, Liping Zhang
ABSTRACT This paper studies the relationship between the local chairperson of the board and the cash dividend distribution level by using annual data from A-share listed firms in China. Firstly, the empirical results show a firm’s cash dividend distribution level will increase when the firm has a local chairperson. The analysis of mediating effect concludes that the local chairperson can improve corporate performance by alleviating the first type of principal-agent problems, and this ultimately increases its cash dividend distribution level. Secondly, the cross-sectional tests show this consistency has a greater effect on the cash dividend distribution levels of state-owned enterprises and those that embraced high-quality external audits. Finally, this relationship will be weakened in firms that have the more serious second type of principal-agent problems.
{"title":"Cash Dividend, Principal-agent Problem and Local Chairperson: Evidence from China","authors":"Xiaohong Yu, Maonan Chen, Liping Zhang","doi":"10.1080/1226508X.2023.2166973","DOIUrl":"https://doi.org/10.1080/1226508X.2023.2166973","url":null,"abstract":"ABSTRACT This paper studies the relationship between the local chairperson of the board and the cash dividend distribution level by using annual data from A-share listed firms in China. Firstly, the empirical results show a firm’s cash dividend distribution level will increase when the firm has a local chairperson. The analysis of mediating effect concludes that the local chairperson can improve corporate performance by alleviating the first type of principal-agent problems, and this ultimately increases its cash dividend distribution level. Secondly, the cross-sectional tests show this consistency has a greater effect on the cash dividend distribution levels of state-owned enterprises and those that embraced high-quality external audits. Finally, this relationship will be weakened in firms that have the more serious second type of principal-agent problems.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"36 1","pages":"51 - 70"},"PeriodicalIF":1.7,"publicationDate":"2023-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75916663","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-11-14DOI: 10.1080/1226508x.2022.2145333
Kwangyong Park
ABSTRACT
In this paper, we analyse the impacts of COVID-19 and the policy response to it in Korea based on a version of a Macro-SIR model with labour friction, and with multiple types of jobs and households. Due to substantial uncertainty in the model and parameters that govern the interaction between epidemiological and macroeconomic developments, we rely on a prior predictive analysis when simulating the model. We find that the model successfully predicts an endogenous rise in the number of confirmed cases in the second half of 2020, and a sharp decline in economic activity followed by a temporary recovery caused by the government transfer program. It also turns out that low-wealth households are more damaged from the pandemic due to larger losses in terms of labour income. In addition, it is shown that the consumption multiplier of the universal transfer program is around 0.09.
{"title":"Macroeconomic Impacts of COVID-19 and Universal Transfer Programs: The Case of Korea","authors":"Kwangyong Park","doi":"10.1080/1226508x.2022.2145333","DOIUrl":"https://doi.org/10.1080/1226508x.2022.2145333","url":null,"abstract":"<p><b>ABSTRACT</b></p><p>In this paper, we analyse the impacts of COVID-19 and the policy response to it in Korea based on a version of a Macro-SIR model with labour friction, and with multiple types of jobs and households. Due to substantial uncertainty in the model and parameters that govern the interaction between epidemiological and macroeconomic developments, we rely on a prior predictive analysis when simulating the model. We find that the model successfully predicts an endogenous rise in the number of confirmed cases in the second half of 2020, and a sharp decline in economic activity followed by a temporary recovery caused by the government transfer program. It also turns out that low-wealth households are more damaged from the pandemic due to larger losses in terms of labour income. In addition, it is shown that the consumption multiplier of the universal transfer program is around 0.09.</p>","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"14 1","pages":""},"PeriodicalIF":1.7,"publicationDate":"2022-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138513861","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-02DOI: 10.1080/1226508X.2022.2151030
C. Chung, A. Fard
ABSTRACT This study investigates whether the effectiveness of institutional monitoring varies depending on the economic conditions of emerging capital markets. By analysing the Korean context, we find that the proportion of institutional trading negatively correlates with income smoothing. This finding indicates that, given the Korean market’s structural characteristics (high ownership concentration, large systematic risk, and a high proportion of individual investors), institutional investors, on average, have a strong preference for short-term investments, which may lead to an increase in managers’ opportunistic earnings reporting to meet institutional investors’ earnings expectations. We select our sample period, with the 2008 financial crisis at its centre, and compare the relationship between the proportion of institutional trading and income smoothing across periods before and after the crisis. Notably, our findings show that, in Korea, the diminished effectiveness of institutional monitoring is more pronounced in the post-financial crisis period, characterised by sluggish market growth. Therefore, within emerging capital markets in a period of low market growth, institutional investors’ long-term investment preferences and monitoring may be subdued because the costs of institutional monitoring may outweigh its benefits. This study provides an improved understanding of the variations in institutional monitoring in emerging capital markets brought on by the market’s structural properties and conditions.
{"title":"Institutional Investors and Earnings Management in the Korean Stock Market","authors":"C. Chung, A. Fard","doi":"10.1080/1226508X.2022.2151030","DOIUrl":"https://doi.org/10.1080/1226508X.2022.2151030","url":null,"abstract":"ABSTRACT This study investigates whether the effectiveness of institutional monitoring varies depending on the economic conditions of emerging capital markets. By analysing the Korean context, we find that the proportion of institutional trading negatively correlates with income smoothing. This finding indicates that, given the Korean market’s structural characteristics (high ownership concentration, large systematic risk, and a high proportion of individual investors), institutional investors, on average, have a strong preference for short-term investments, which may lead to an increase in managers’ opportunistic earnings reporting to meet institutional investors’ earnings expectations. We select our sample period, with the 2008 financial crisis at its centre, and compare the relationship between the proportion of institutional trading and income smoothing across periods before and after the crisis. Notably, our findings show that, in Korea, the diminished effectiveness of institutional monitoring is more pronounced in the post-financial crisis period, characterised by sluggish market growth. Therefore, within emerging capital markets in a period of low market growth, institutional investors’ long-term investment preferences and monitoring may be subdued because the costs of institutional monitoring may outweigh its benefits. This study provides an improved understanding of the variations in institutional monitoring in emerging capital markets brought on by the market’s structural properties and conditions.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"17 1","pages":"333 - 354"},"PeriodicalIF":1.7,"publicationDate":"2022-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78847301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-02DOI: 10.1080/1226508X.2022.2151029
Yunok Cho, Jungho Kim
ABSTRACT This article investigates how a firm’s foreign equity share affects its likelihood of strategic alliances with local firms, discussing the benefits and costs of such strategic alliances. Analysing a panel dataset of Korean firms, we find the inverted U-shaped relationship between foreign equity share and the likelihood of alliance involvement. We also find that the relationship depends on the types of alliance partner and industry. This relationship is relatively steeper when the foreign-owned firm collaborates with a local firm in a different industry. The negative effect of foreign equity share on the likelihood of strategic alliances dominates in high-technology industries.
{"title":"Strategic Alliances between Foreign-Owned Firms and Local Firms: The Role of Partner and Industry Types","authors":"Yunok Cho, Jungho Kim","doi":"10.1080/1226508X.2022.2151029","DOIUrl":"https://doi.org/10.1080/1226508X.2022.2151029","url":null,"abstract":"ABSTRACT This article investigates how a firm’s foreign equity share affects its likelihood of strategic alliances with local firms, discussing the benefits and costs of such strategic alliances. Analysing a panel dataset of Korean firms, we find the inverted U-shaped relationship between foreign equity share and the likelihood of alliance involvement. We also find that the relationship depends on the types of alliance partner and industry. This relationship is relatively steeper when the foreign-owned firm collaborates with a local firm in a different industry. The negative effect of foreign equity share on the likelihood of strategic alliances dominates in high-technology industries.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"26 1","pages":"355 - 376"},"PeriodicalIF":1.7,"publicationDate":"2022-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78700405","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-10-02DOI: 10.1080/1226508X.2022.2143703
Kwangyong Park
ABSTRACT In this paper, we analyse the impacts of COVID-19 and the policy response to it in Korea based on a version of a Macro-SIR model with labour friction, and with multiple types of jobs and households. Due to substantial uncertainty in the model and parameters that govern the interaction between epidemiological and macroeconomic developments, we rely on a prior predictive analysis when simulating the model. We find that the model successfully predicts an endogenous rise in the number of confirmed cases in the second half of 2020, and a sharp decline in economic activity followed by a temporary recovery caused by the government transfer program. It also turns out that low-wealth households are more damaged from the pandemic due to larger losses in terms of labour income. In addition, it is shown that the consumption multiplier of the universal transfer program is around 0.09.
{"title":"Macroeconomic Impacts of COVID-19 and Universal Transfer Programs: The Case of Korea","authors":"Kwangyong Park","doi":"10.1080/1226508X.2022.2143703","DOIUrl":"https://doi.org/10.1080/1226508X.2022.2143703","url":null,"abstract":"ABSTRACT In this paper, we analyse the impacts of COVID-19 and the policy response to it in Korea based on a version of a Macro-SIR model with labour friction, and with multiple types of jobs and households. Due to substantial uncertainty in the model and parameters that govern the interaction between epidemiological and macroeconomic developments, we rely on a prior predictive analysis when simulating the model. We find that the model successfully predicts an endogenous rise in the number of confirmed cases in the second half of 2020, and a sharp decline in economic activity followed by a temporary recovery caused by the government transfer program. It also turns out that low-wealth households are more damaged from the pandemic due to larger losses in terms of labour income. In addition, it is shown that the consumption multiplier of the universal transfer program is around 0.09.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"20 1","pages":"304 - 332"},"PeriodicalIF":1.7,"publicationDate":"2022-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75003700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-26DOI: 10.1080/1226508X.2022.2122530
C. Choi, Narantsetseg Chinzorigt, Noori Park
ABSTRACT Mobile is a key sector promoting international trade, FDI and economic growth in the modern era. The objective of this paper is to examine the dynamic nexus between Mobile, trade, FDI and economic growth by employing a panel vector error correction model. Empirical results suggest that Mobile has more positively contributed to international trade in the low income country group than other groups, and it has a more positive impact on FDI inflow in the higher-income country group than other groups, it has a more powerful impact on economic growth in the middle-income country group than other groups.
{"title":"How Mobiles Affect International Trade, FDI and Economic Growth: Comparative Analysis of Income Level","authors":"C. Choi, Narantsetseg Chinzorigt, Noori Park","doi":"10.1080/1226508X.2022.2122530","DOIUrl":"https://doi.org/10.1080/1226508X.2022.2122530","url":null,"abstract":"ABSTRACT Mobile is a key sector promoting international trade, FDI and economic growth in the modern era. The objective of this paper is to examine the dynamic nexus between Mobile, trade, FDI and economic growth by employing a panel vector error correction model. Empirical results suggest that Mobile has more positively contributed to international trade in the low income country group than other groups, and it has a more positive impact on FDI inflow in the higher-income country group than other groups, it has a more powerful impact on economic growth in the middle-income country group than other groups.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"2 1","pages":"287 - 303"},"PeriodicalIF":1.7,"publicationDate":"2022-09-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87562347","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-03DOI: 10.1080/1226508X.2022.2102055
A. K. Panda, S. Nanda, S. Sahoo
ABSTRACT The study aims to examine the evidence of transmission of monetary policy impulses to a firm’s profitability and highlights that short-term financing decision fails to enhance the profitability of the firms during tight monetary policy except for the firms with high quantile of profitability. During tight monetary policy, the profitability of firms from median quantiles of profitability and above is negatively impacted. After incorporating price-cost margin, we find that the short-term financing decisions of high price-cost margin firms are hardly responsive to monetary policy. However, for long-term financing, firms with high mark-up and high profitability support profitability positively.
{"title":"Transmission of Monetary Policy Impulses to a Firm’s Profitability: An Empirical Analysis of Manufacturing Firms","authors":"A. K. Panda, S. Nanda, S. Sahoo","doi":"10.1080/1226508X.2022.2102055","DOIUrl":"https://doi.org/10.1080/1226508X.2022.2102055","url":null,"abstract":"ABSTRACT The study aims to examine the evidence of transmission of monetary policy impulses to a firm’s profitability and highlights that short-term financing decision fails to enhance the profitability of the firms during tight monetary policy except for the firms with high quantile of profitability. During tight monetary policy, the profitability of firms from median quantiles of profitability and above is negatively impacted. After incorporating price-cost margin, we find that the short-term financing decisions of high price-cost margin firms are hardly responsive to monetary policy. However, for long-term financing, firms with high mark-up and high profitability support profitability positively.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"37 1","pages":"265 - 285"},"PeriodicalIF":1.7,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82356047","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-03DOI: 10.1080/1226508X.2022.2120517
Yunqi Fan, Guanglei Hu
ABSTRACT This study finds that institutional investment constraint increases stock price crash risk. We employ both instrumental variable approach and a quasi-experiment to identify the causal effect. We also find institutions are more likely to sell stocks with stronger institutional investment constraint in response to firm’s bad news. In addition, the positive relationship between institutional investment constraint and crash risk is less pronounced for institutions of larger size and better past performance. These results are consistent with managerial catering explanation rather than career concern and soft information explanations. Finally, the channel analysis shows that the effect of institutional investment constraint on crash risk is mediated by predatory selling and investor information competition.
{"title":"Capital Market Consequence of Institutional Investment Constraint: Evidence from the Stock Price Crash Risk in China","authors":"Yunqi Fan, Guanglei Hu","doi":"10.1080/1226508X.2022.2120517","DOIUrl":"https://doi.org/10.1080/1226508X.2022.2120517","url":null,"abstract":"ABSTRACT This study finds that institutional investment constraint increases stock price crash risk. We employ both instrumental variable approach and a quasi-experiment to identify the causal effect. We also find institutions are more likely to sell stocks with stronger institutional investment constraint in response to firm’s bad news. In addition, the positive relationship between institutional investment constraint and crash risk is less pronounced for institutions of larger size and better past performance. These results are consistent with managerial catering explanation rather than career concern and soft information explanations. Finally, the channel analysis shows that the effect of institutional investment constraint on crash risk is mediated by predatory selling and investor information competition.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"85 1","pages":"232 - 264"},"PeriodicalIF":1.7,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77684608","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-03DOI: 10.1080/1226508X.2022.2120518
Dan-yang Li, Xinyao Wang, Yubing Xu, Yutian Ren
ABSTRACT Due to the importance of product and geographical diversification of exports, the gravity equation was used to predict export diversification for 19 Asian countries from 2004 to 2017 and the System Generalised Method of Moments was used to analyse the dynamic impact of globalisation at the disaggregated level of the diversification of sectoral exports and the goods specialisation on income inequalities. The results show that sectoral diversification of exports is the driving force of inequality. Furthermore, increased diversification of exports in the highly-income countries of Asia increases inequality and has little impact on low-income countries in Asia.
{"title":"Analysis of Export Diversification and Impact of Globalisation on Income Inequality: Evidence from Asian Countries","authors":"Dan-yang Li, Xinyao Wang, Yubing Xu, Yutian Ren","doi":"10.1080/1226508X.2022.2120518","DOIUrl":"https://doi.org/10.1080/1226508X.2022.2120518","url":null,"abstract":"ABSTRACT Due to the importance of product and geographical diversification of exports, the gravity equation was used to predict export diversification for 19 Asian countries from 2004 to 2017 and the System Generalised Method of Moments was used to analyse the dynamic impact of globalisation at the disaggregated level of the diversification of sectoral exports and the goods specialisation on income inequalities. The results show that sectoral diversification of exports is the driving force of inequality. Furthermore, increased diversification of exports in the highly-income countries of Asia increases inequality and has little impact on low-income countries in Asia.","PeriodicalId":45235,"journal":{"name":"Global Economic Review","volume":"24 1","pages":"195 - 215"},"PeriodicalIF":1.7,"publicationDate":"2022-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80272816","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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