Ho-Kyung Bang

The Impact of UN Sanctions on North Korea's Luxury Goods Imports

This paper aims to analyze the economic impacts of UN sanctions on North Korea’s banned luxury goods imports. The analysis is based on applying Difference-in-Differences Methods to the gravity model. The results show that North Korea’s luxury goods import patterns reflect the aforesaid model. The result of Difference-in-Differences shows that UN Resolutions 1695 and 1718 were ineffective in decreasing North Korea’s luxury goods imports. This paper also found that four countries, primarily China, accounted for 91.4% of North Korea’s luxury goods imports in 2007, and the share of North Korea’s luxury goods accounted for about 5.3% of North Korea’s overall imports.

An Analysis of Urbanization in Africa and Its Implications for Korea: Future Demands for Urban Infrastructure

Cities and urban areas function as engines for economic growth as they mobilize labor and capital to create economies of scale through the agglomeration of production factors and increase productivity. They also create a consumer base through whose consumption of manufactured products encourages economic growth. Consequently, cities generate economic value that amount up to 80 percent of the global GDP. They also expand as rural labor is pushed out as a result of green innovation and technological development. Interestingly, Africas cities have expanded neither through industrialization nor technological innovation. Africas urban population is relatively small compared to other regions of the world but its growth is expected to accelerate in the near future. However, this rate of expansion and attention is unaccompanied by an improvement in physical and institutional infrastructure. As a result, Africas urban areas are sprawled by the expansion of slums while social infrastructure such as road, power, water and sanitation, and industrial production facilities is far from sufficient. As Africas urbanization comes with many side effects triggered by the infrastructure deficit, the development of economic and social infrastructure could aid its economic transformation. Using the various methods of pooled OLS, fixed effects model and system GMM, estimations on the future demand for infrastructure in the road, water and sanitation, and power sectors were conducted. Results indicate that demand is highest in the power sector followed by road and then by water and sanitation. Based on Koreas experience and expertise and in consideration of the calculated estimations, Korea can cooperate with Africa by developing policies for urban planning (soft infrastructure), building physical infrastructure (hard infrastructure), and providing assistance in the establishment of industrial complexes. Detailed examples include reforming land regulation systems, establishing the Intelligent Transport System (ITS) and utilizing co-financing capital for infrastructure development.

A Proposal to Lower Non-Tariff Barriers between China-Japan-Korea

Under the GATT and WTO regimes, the level of tariff rates has gradually declined while non-tariff measures have become more prevalent worldwide. Among many types of non-tariff measures, the number of TBT and SPS measures implemented increased substantially during the global financial crisis, implying that countries around the world are employing more subtle measures to protect their domestic economy. Harmonizing TBT/SPS related regulations between countries is important in eliminating the unnecessary barriers to trade. In this aspect, this study focuses on the current status of non-tariff measures, especially on TBT and SPS measures, in China, Japan, and Korea and proposes to utilize the existing Pan-Yellow Sea Rim Economy and Technology Exchange Meeting to discuss (a) harmonization of standards, (b) mutual recognition of conformity assessment, and (c) enhancement of transparency issues to lower the regulatory barriers relevant to TBT and SPS measures.

A review on Korea, China and Japan's comparative advantage in the IT services sector Focusing on productivity analysis

This research attempts to draw the policy implication of cooperative activities among Korea, China and Japan based on an analysis on a comparative advantage of the IT service industry, focusing on productivity analysis. The results of the productivity (efficiency) analysis show that productivity gap exists between the three countries, but the gap is narrowing. The changing gap seems to result from a catch-up effect between countries and companies rather than technical advancement across the industry. In addition, a close look into the institutional framework which affects the productivity of IT services sector in Korea, China and Japan revealed five areas (introduction and enforcement of regulations, existing legal and regulatory frameworks, transparency of IT related policies, preferential treatment of home-grown technologies in the public sector, bureaucracy) that can prove to be excessive regulations on IT service companies. Based on the study results, this paper draws the policy implications for further cooperation among three countries. First, the three countries could cooperate in building a common data set for a more concrete productivity analysis. Second, the three countries could further cooperate in the industry level and lower the entry barriers for instance. Finally, the three countries could cooperate to upgrade the expertise of middle management and foster human resource development.

Determinants of Economic Growth in Transition Economies: Implications for Economic Reform in North Korea

Instability in the North Korean economy and regime stands out as one of the most important challenges for the South Korean economy. However, despite the significance and severity of the issue, there is presently a comparative lack of research on the potential for change in the North Korean economy, or policy preparedness in the event it occurs. The purpose of this study is to suggest policy measures that would support the successful transition of the North Korean regime. To this end, the study estimates the determinants of economic growth of both market economies and transition countries. Furthermore, the study examines the characteristics of economic growth determinants by income level and draws implications for North Koreas transition to a market economy. Based on theoretical and empirical analysis, this study brings North Koreas transition and economic growth issues into the spotlight to elicit policy measures for the regimes economic growth, while at the same time suggesting the general direction for inter-Korean economic cooperation on the part of the South Korean government.

Exploring the Intensive and Extensive Margins of the Recent China-North Korea Trade

This paper examined and analyzed recent trends of the China-North Korea trade using intensive and extensive margins. North Korea’s trade with China, especially its increasing dependence on China, was analyzed as being determined mostly by quantity and price of small number of items rather than the diversification of products. In addition, North Korea’s export items that are closely related to quantity and price effects are mostly underground resources. Therefore, they are highly vulnerable to external factors, such as commodity market volatility. In particular, the fact that China-North Korea trade is confined to a small number of items makes attempts by North Korea to pursue growth through trade with China very difficult.

Trade Patterns and Determinants of International Specialization Structure between ASEAN and China

China and ASEAN are recognized as the most important markets in the world, hence they have emerged as global factories and parts production bases. And trade between China and ASEAN is rapidly expanding and ASEAN has taken position as one of Chinas three major trading partners. Over the last 20 years, there has been a rapid increase in intra-industry trade where differentiated products are traded within the same industries between China and ASEAN countries. Empirical analysis on determinants of the international specialization structure between China and ASEAN countries shows that the deepening structure of vertical international specialization between the two regions over the past 20 years has been directly influenced by variables representing national characteristics, such as distance (trading cost), common language, the size of the national economy and income gap as well as intra-regional foreign direct investment.