Bang Nam Jeon

Determining Factors for the Adoption of E-Business: The Case of SMEs in Korea

This study investigates the determining factors of the successful adoption of e-business by small and medium enterprises (SMEs) in Korea using survey data. After the major determining factors were identified from the innovation adoption literature and were extracted by applying the principal component analysis to the survey data and by adding the country-specific characteristics of Korea, we conducted empirical analyses to determine the critical success factors for the adoption of e-business by Korean firms. The empirical results which are based on t-tests of the differences between adopters and non-adopters, the linear probability model, and the logit model, all suggest that the important determinants of the successful adoption of e-business by SMEs in Korea are: the CEOs knowledge of information technology (IT)/e-business, relative advantages and benefits from implementing e-business, governmental support, globalization strategy and the North Korean factor. Business size, the cost of e-business adoption and competitive pressure of the industry do not seem to play an important role in the adoption of e-business by Korean SMEs. The policy implications of this study on promoting e-business adoption by SMEs in emerging economies, such as Korea, are also discussed.

A system of stock prices in world stock exchanges: Common stochastic trends for 1975-1990

Abstract This article reports an investigation of the behavior of stock prices in major world stock exchanges based on univariate and multivariate approaches. The evidence shows that each series of stock prices in the New York, London, Tokyo, and Frankfurt stock exchanges during the period from January 1975 through March 1990 has a unit root. The multivariate tests for unit roots, however, show that there are three unit roots in a system of stock prices in the worlds four largest stock exchanges, suggesting the existance of a common stochastic trend in the system. The subsample estimation results are consistent with greater globalization of world stock markets during the 1980s.

International R&D Spillovers: Trade, FDI, and Information Technology as Spillover Channels

With the rapid pace of economic integration, the productivity of a country depends not only on domestic R&D, but also on foreign R&D through technology diffusion across countries. The advancement of information technology (IT) has made the international transmission of knowledge faster and more efficient, providing an important channel for international R&D spillovers. This paper investigates three channels of international R&D spillovers: trade, FDI, and information technology. Applying panel cointegration and dynamic OLS analysis to the data for 21 OECD countries plus Israel during the period from 1981 to 1998, we find that bilateral trade remains an important conduit for international R&D spillovers. Although bilateral FDI is found to be positively related to international R&D spillovers, their impact on productivity growth is relatively small. We also find that the development of information technology has played a more important role in international R&D spillovers and productivity growth in recent years.

Foreign exchange market efficiency, cointegration, and policy coordination

This paper examines market efficiency of the major foreign exchange markets during the post-Bretton Woods era by applying the bivariate and multivariate cointegration estimations to the weekly data of seven major foreign exchange rates. In particular, this study investigates whether the major foreign exchange policy coordinations, such as the Plaza Agreement (1985) and the Louvre Accord (1987), affected the long-run relations of the bilateral spot-forward and multivariate exchange rates. The findings of this study are: first, empirical evidence based on the bivariate and multivariate cointegrations is mostly consistent with the efficient market hypothesis in the major foreign exchange markets during the post-Bretton Woods era; second, the international policy coordinations during the late 1980s have affected acrosscountry market efficiency by introducing common stochastic trends in the system of the seven major foreign exchange markets during the period of the policy implementation, but the market inefficiency did not last long; and third, within-country market efficiency appears to have become stronger in the post-Plaza agreement period than before, evidenced by exhibiting more cointegrating vectors, and have not been affected by the major foreign exchange policy coordinations.

The dynamic impact of macroeconomic factors on initial public offerings: evidence from time-series analysis

This article examines the explanatory power and the dynamic impact of macroeconomic conditions on Initial Public Offering (IPO) activities in US during the period from 1970 to 2005. Applying time-series econometric techniques, we find the existence of long-run equilibrium relationships between IPO activities and selected macroeconomic variables. Stock market performance and volatility are shown to play the most important role in the timing of IPOs. The Fed funds rate and the 10 year US Treasury Bond (TB) yield play a comparable role in determining the amount of proceeds raised in the IPOs. There also exist different short-run dynamic adjustment mechanisms between IPOs and macroeconomic factors towards the long run equilibrium path and they are mostly completed within the period of 6 months to 1 year. The results have some useful implications for forecasting IPO activities.

Techniques for measuring the welfare effects of protection: Appraising the choices

Abstract In the last few years there have been a bewildering variety of proposals on how the static welfare costs of protection are best conceptualized and measured. A survey and appraisal appears called for to show how the concepts differ and under what conditions they turn out to be special cases of each other. Furthermore, if actual measures are required, what is the loss of accuracy that arises from using methods which, while conceptually inferior to others in most cases, require fewer, and less uncertain, informational inputs?

Financial Links and Contagion in the 1997 Asian Currency Crisis: An Empirical Examination

This paper provides evidence of financial linkages across countries as a channel of contagion of currency crises in the case of the 1997 Asian crisis using high-frequency data, focusing on the hardest hit countries in the region: Thailand, Indonesia, Malaysia, and Korea. Stock markets in the region were found to play an important role in transmitting initial and local shocks beyond its country of origin to other emerging economies during the 1997 crisis. Stock market linkages seem to have contributed importantly to the quick and wide-scale contagion of the ensuing exchange rate crisis across countries in the 1997 Asian crisis episode.

HAS INTERNATIONAL CAPITAL MOBILITY INCREASED IN ASIA? EVIDENCE FROM THE POST‐1997 FINANCIAL CRISIS PERIOD

This paper examines whether international capital mobility in Asia has increased after the 1997 Asian financial crisis by estimating the Feldstein‐Horioka (FH) coefficients using panel cointegration and dynamic OLS regressions. In the benchmark estimation, we find that the FH coefficients of ten Asian economies decrease significantly from 0.65 during the pre‐crisis period to 0.32 during the post‐crisis period. Furthermore, the coefficient for the post‐crisis period is less statistically significant than that for the pre‐crisis period. The extended model estimations with additional control variables controlling for the business cycle, different foreign exchange rate systems, and capital control also show the results which are consistent with the benchmark estimation results. Rolling regressions show a consistently declining trend of the FH coefficients in Asia during our sample period. These results provide consistent evidence, according to the FH proposition, of increasing international capital mobility in Asia during the post‐1997 Asian financial crisis period.

Does Distance Affect the Performance of Foreign Banks? Evidence from Multinational Banking in Developing Countries

This paper examines whether the geographic distance between subsidiaries of multinational banks and their headquarters is an important factor in determining the performance of the subsidiaries. Using various performance indicators of 340 subsidiaries in 54 emerging and developing economies from 69 global banks during the years 1994-2008, we find evidence that first, the distance constraint adversely affects loan growth, profitability and performance of foreign bank subsidiaries, and second, the unfavorable information asymmetry faced by foreign banks, due to the distance constraint, in financing foreign clients cannot be fully overcome by establishing their presence abroad such as setting up their foreign subsidiaries. We further examine if the effect of distance is symmetric across different banks and countries, and find the following various economic, financial and institutional factors to affect the strength of distance constraints in the multinational banking activities: the entry mode of foreign banks, the history of presence in local markets, the existence of credit information institutions, the cultural similarity between the home and host markets, financial depth, financial crisis periods, the stock market development, the banking market structure in host markets, and the hierarchy of the subsidiary in the multinational banking conglomerate.

Do foreign banks take more risk? Evidence from emerging economies

This paper addresses the impact of foreign ownership on the risk-taking behavior of banks. Using bank-level panel data of more than 1300 commercial banks in 32 emerging economies during 2000–2013, we find that foreign owned banks take on more risk than their domestic counterparts. We further examine several factors that may potentially contribute to foreign banks’ differentiated riskiness from four perspectives, namely, foreign banks’ informational disadvantages, agency problems, the contagious effect of parent banks’ financial conditions and the disparity between home and host markets. We find supportive evidence that these factors play a significant role in affecting foreign banks’ risk-taking.