Hyung-Gon Jeong

The Determinants of Foreign Direct Investment in the Business Services Industry

Abstract This report aims to identify the determinant factors of FDI in the business services industry by examining 20 variables and their impacts on attracting foreign investment in 33 sample countries plus Hong Kong. The results of this study indicate that system-related factor conditions and demand conditions have a strong correlation to FDI. Among the variables under system-related factor conditions, four (bribery and corruption, transparency, intellectual property rights (IPR), and ease of doing business) greatly influence the amount of FDI in the business services industry. Among the variables under demand conditions, three (the cost of living index, office rent, and GDP) are key. At the same time, this paper concludes that the aforementioned factors influence not only the business services sector, but the manufacturing industrys FDI as well. Another main finding of this paper is that the FDI in the business services industry is more frequently found in more developed economies. For the market seeking and efficiency-seeking FDI, the quality of system-related factor conditions and the size of GDP are of particular importance for FDI in the business services industry.

The determinants of economic growth of transition economies: Economic reform versus initial conditions

Abstract This study analyzes factors for economic recovery of transition economies in Europe and the Commonwealth of Independent States for the period of the 1990s. Covariance structure analysis is employed to estimate the structural equation system, and exploratory factor analysis is conducted to measure initial conditions and economic policy as latent variables. The result of analysis shows that the effect of initial conditions is negative and the impact of economic reform on growth is positive. However, the negative effect of initial conditions had overridden the positive impact of economic policy as of 2000. The reason that transition economies could not recover their pre-transition GDP level (even after ten years of transition history) seems to stem from the negative influence of initial conditions on growth rather than the slow speed of economic reform.

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.

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.