Asian Economic Journal最新文献

In this paper, we explore the possible policy responses to the COVID-19 pandemic shock as well as the related economic (financial crisis) shocks on trade and global value chains (GVC) in East Asia. We find that regional policy coordination is critical to mitigate and isolate the pandemic shock. It is important to identify the pandemic events early to flatten the pandemic curve at the national and regional level. This supports a recent study by the World Bank (2020), which highlights the importance of early mitigation policies during the pandemic shock. The cost of the pandemic and economic shocks will increase significantly when several countries in the region experience the pandemic shock concurrently. In this case, flattening the regional pandemic curve becomes important. The results also indicate the need for greater coordination in East Asia to mitigate the pending economic shock in terms of unemployment, corporate bankruptcy and financial market fragility. The paper also highlights that the stability of the GVC network is critical during the pandemic in terms of hedging the risk of disruptions to the procurement of critical medical and health products as well as maintaining service linkages to manufacturing, such as the logistics sector. Regional policy coordination and the stability of GVC will be valuable in the post-pandemic recovery of the region.

This paper investigates a pattern of price revision by firms in Korea and sheds light on the cause of price stickiness by providing reliable statistical estimates for calibration of the parameters of the widely-used macro-models. Based on firm-level survey data and using a probit model, we identify the firm characteristics or market conditions that discourage firms from carrying out state-dependent price adjustment. We also estimate the factors driving firms to engage in state-dependent adjustment rather than wait until the next scheduled revision under three different shocks: demand, general cost and exchange rate shocks. We find a few interesting features, as follows. First, price revision by Korean firms tends to be time-dependent rather than state-dependent, with a sizable dispersion across sectors and firm sizes. Second, the pattern of price revision in Korea is not significantly different from that in selected advanced economies. Third, the reason why firms favor time-dependent price adjustments appears to be endogenous, accounted for by a number of market institution variables. Fourth, in response to shocks, Korean firms tend to wait until the next periodically scheduled revision rather than make a state-dependent price adjustment, unless marginal costs are affected significantly by the shock, and state-dependent revisions are often significantly delayed when they do occur.

The growth of zombie firms has caused increasing concern. The present study seeks to understand why zombie firms have been emerging in recent 10 years and to further explore the mechanisms of their formation. Based on a dataset of Chinese listed companies from 2012 to 2016 and empirical analysis, the present study ascribes the prevalence of zombie firms to soft budget constraints. After using a modified identification model in the Chinese context, we concluded that zombie firms have access to some external resources such as credit support from banks and governmental subsidies, substantiating soft budget constraints among zombie firms. To explain this phenomenon, further analysis reveals that zombie firms bear a heavier policy burden by hiring excess employees, which will bring them more subsidies and a stronger relationship with government in return. This result indicates that policy burden is the reason for soft budget constraints, which exacerbates the zombie firm problems in China.

This study investigated consumers' valuation of geographical indication (GI) and protected geographical indication (PGI)-labeled rice in Bangkok using a non-hypothetical experimental auction in a field setting. We also examined the effects of sequentially providing information about geographical indications on product valuation. The results suggest that consumers are willing to pay premiums for rice with geographical certifications, with the highest premium for the rice with both GI and PGI certifications. The provision of detailed information about the geographical indications further increases the premiums. However, consumers suffer a welfare loss under the current high market prices for rice with geographical certifications. A price reduction of approximately 10 percent would be needed to gain consumer welfare from the introduction of GI and PGI certification.

This paper examines consumption risk sharing among 16 regions in South Korea over the 2000–2016 period. The empirical results show that 91.8 percent of shocks to gross regional domestic product are smoothed in South Korea. Capital markets, the tax-transfer system and credit markets absorb 29.9, 28.9 and 33.0 percent of shocks to gross regional domestic product, respectively. Most notably, South Korea relies more on credit markets for risk sharing than capital markets, an opposite pattern to advanced countries like the USA, Canada and Australia. Furthermore, the patterns of consumption risk sharing are different before and after the 2007–2008 global financial crisis, and differences in regional industrial structure and local development can influence these patterns. This paper attempts to infer the connection between these findings and both the rapid economic growth of South Korea and the Asian and global financial crises.