Policy Analyses
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Policy Analyses
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Mesuring the Barriers for Service Trade and Its Policy Implications
The purpose of this research is measuring barriers for the service trade on telecommunications, constructions, and professional service sectors in seven OECD countries including Korea and suggesting policy implications by estimati..
Hankyoung Sung et al. Date 2009.12.30
Trade policy, Free tradeDownloadContentSummaryThe purpose of this research is measuring barriers for the service trade on telecommunications, constructions, and professional service sectors in seven OECD countries including Korea and suggesting policy implications by estimating economic effects when those are eliminated.
In the second chapter, we study the characteristics and trade flows of the three service sectors. Telecommunication services, which used to provided by state-owned enterprises (SOEs), is considered regulations would be necessary to keep the market competitive. The construction services may be restricted by several regulations since mostly those need to be provided by commercial presence. Professional services that include legal, accounting, architecture, and engineering was highly regulated but the discussions on its opening and facilitating competition is widely in process. (The rest is omitted) -
Development Strategies for Korean IT Services in the Era of Globalization
Creation of many high quality jobs is very important for the domestic economy, in order to secure a new engine of growth and to reduce polarization. Knowledge-based services, and business services in particular, are attracting muc..
Yeongkwan Song et al. Date 2009.12.30
Economic development, Industrial policyDownloadContentSummaryCreation of many high quality jobs is very important for the domestic economy, in order to secure a new engine of growth and to reduce polarization. Knowledge-based services, and business services in particular, are attracting much attention in this regard. Business services develops as other sectors of the economy, such as manufacturing, progress into a higher level. In developed countries, business services have developed naturally in line with their economic progress. The development of business services in turn raised the efficiency of companies, creating a virtuous circle.(The rest is omitted) -
Economic Impact of an FTAAP: Implication and Significance for Korean Economy
Since its inception in 1989, Asia-Pacific Economic Cooperation (APEC) has long been strived to evolve the vision of building the Asia-Pacific economic community into the stage of maturity under the principle of 'open regionalism.'..
Sangkyom Kim et al. Date 2009.12.30
Economic integration, Economic cooperationDownloadContentSummarySince its inception in 1989, Asia-Pacific Economic Cooperation (APEC) has long been strived to evolve the vision of building the Asia-Pacific economic community into the stage of maturity under the principle of 'open regionalism.' However, with its 20th anniversary, APEC appears to be adrift in the middle of formidable challenges demanding major changes and reforms. Among others, challenges posed by its unique feature, represented by dynamism and diversity, is worth to note for further deliberation. While the growing interdependence in our region by economic dynamism heightened the need for the APEC to strengthen regional economic integration its diversity which in effect produces the heterogeneity of economic interests and political stances makes it very difficult to construct a proper architecture for the region as a whole.(The rest is omitted) -
Effective Implementation of Korea-ASEAN FTA: Trade in Goods
Interest of government, the media, and the academic world for concluding FTA tends to focus on how broad the openness of markets would be, or how fast tariff elimination or reduction could be achieved. It is a clear fact that the ..
HanSung Kim et al. Date 2009.12.30
Trade policy, Free tradeDownloadContentSummaryInterest of government, the media, and the academic world for concluding FTA tends to focus on how broad the openness of markets would be, or how fast tariff elimination or reduction could be achieved. It is a clear fact that the breadth and depth of market opening is a staple issue for each participant, yet to recognize how to utilize a concluded FTA efficiently is a question as significant as to concluding FTA. (The rest is omitted) -
Comparison of Competitiveness among Korea-China-Japan on Business Service by Analysis of the Determinant for FDI
Recently, along with the globalization of economic activities and expanded competition, cases where companies are outsourcing nonessential part of their work in order to maximize comparative advantage are increasing. Outsourcing d..
Hyung-Gon JEONG et al. Date 2009.12.30
Regulatory reform, Foreign direct investmentDownloadContentSummaryRecently, along with the globalization of economic activities and expanded competition, cases where companies are outsourcing nonessential part of their work in order to maximize comparative advantage are increasing. Outsourcing directly related to manufacturing production used to be limited to design and engineering, but it now has expanded into the field of business-related services, such as management consulting and advertising. Under such circumstances, the importance of the business service industry is growing in both quantitative and qualitative aspects. In many of the developed nations including the United States, the business service industry takes up 12~14% of the entire economy. In the case of Korea, the proportion is still low,but it has been showing signs of rapid growth.(The rest is omitted) -
An Exploration of an Integration Index and its Application for Asian Regional Community
The purpose of this research is to develop a regional integration index and apply the index to East Asia, as well as other major regional communities, such as ASEAN, EU, MERCOSUR, and NAFTA. The regional integration index was cons..
Heungchong Kim et al. Date 2009.12.30
Economic integration, Economic cooperationDownloadContentⅠ. Introduction Ⅱ. Introduction of the Regional Integration Index Ⅲ. Application of the Regional Integration Index Ⅳ. Comparison and Interpretation Ⅴ. Conclusions ReferencesSummaryThe purpose of this research is to develop a regional integration index and apply the index to East Asia, as well as other major regional communities, such as ASEAN, EU, MERCOSUR, and NAFTA. The regional integration index was constructed to measure the degree of integration in terms of four criteria: functional integration, political/security integration, social and cultural integration, and institutional integration. In the case of East Asia, the region scored low in 1994 at the inception of regional integration, in terms of indices for political/security and institutional integration, mainly due to the lack of political leadership. However, the functional integration index was higher than in other regions at the initial stage, despite the absence of an economic union. During the development stage of integration of East Asia in 2000, the regional integration index increased. In 2007, the overall score increased as well, but the functional integration index actually decreased due to the reduction of intra-regional FDI. Noticeable increase in the socio-cultural index was observed in the region as East Asia was swept by the spreading popularity of Korean pop culture known as Hallyu, or the Korean wave. Currently, the integrative factors in the socio-cultural arena in East Asia is lower than those of EU and NAFTA, but almost the same as those of ASEAN and MERCOSUR. The political and security factor is much lower than those of EU and MERCOSUR, and even lower than those of ASEAN and NAFTA. Following policy recommendation from Kim and Park(2004), the following implications for the East Asian integration can be suggested. First, East Asian countries need to make efforts to attain qualifications as an area with greater economic integration. To this end, economic cooperation needs to increase in terms of trade, and institution-building for exchange rate stability must commence. Second, it would be vital to make an advanced blueprint for regional cooperation and integration in East Asia. Third, East Asian countries need greater exposure to opportunities for binding negotiations on regional issues, and accumulate sufficient experience in resolving the issues. Fourth, a variety of policies are required so that potential 'losers' in regional integration would be encouraged to continue their engagement in the process. Finally, it is strongly recommended that a kind of core group be formed so as not to lose the driving force for integration. Case in point, Germany and France have kept a key bilateral relation as a linchpin over the course of the entire European integration process. In East Asia, Japan and China are expected to play such a role, but if the two countries are not suited for the role or up to the challenge, Korea is strongly recommended to initiate the necessary multilateral relation. -
The Impact of Mutual Recognition Agreements on Foreign Direct Investment and Export
This paper analyzes the trade-off relationship between exports and horizontal FDI in response to a mutual recognition agreement (MRA) for technical regulations and certification procedures for import goods. As an MRA is concluded ..
Yong Joon Jang Date 2009.12.30
Barrier to trade, Overseas direct investmentDownloadContentI. Introduction Ⅱ. Theoretical Framework Ⅲ. Data Ⅳ. Econometric Specifications Ⅴ. Empirical Results Ⅵ. Conclusion References AppendixSummaryThis paper analyzes the trade-off relationship between exports and horizontal FDI in response to a mutual recognition agreement (MRA) for technical regulations and certification procedures for import goods. As an MRA is concluded to reduce entry costs of exporting, multinationals (MNEs) derive more benefits from economies of scale than from tariff-jumping strategies, implying that they have more incentive to export than to perform horizontal FDI. In order to prove the above argument, the paper develops a monopolistic competition model with international trade, heterogeneous firms and MRA, based on the work of Helpman, Melitz and Yeaple (2004); and then tests empirically the theoretical results, utilizing data from U.S. multinational affiliate sales and exports. The empirical results show that MRAs have positive effects on the U.S. exports relative to horizontal FDI, bringing the results in line with the theoretical model. -
Effects of International Economic Shocks and Macroeconomic Policies
Korean Economy has been affected by various international economic shocks, since it is export-dependent small open economy. It has been directly influenced by import countries' business cycle because of its high dependence on expo..
Dong-Eun Rhee et al. Date 2009.12.30
Economic development, Financial crisisDownloadContentSummaryKorean Economy has been affected by various international economic shocks, since it is export-dependent small open economy. It has been directly influenced by import countries' business cycle because of its high dependence on export, while it has been also vulnerable to the changes of raw material prices. Moreover, recently as the share of foreign investors increases, the financial sector is exposed to financial risks from the foreign countries. This study aims at explaining the effects of the international economic shocks on Korean economy, and analyzing the effectiveness of macroeconomic policies as countermeasures. This study is different from previous studies in this area in that it reflects recent international economic environment which has been dramatically changed since 2000s, and uses 5-country open economy macroeconomic model.(The rest is omitted) -
Economic Effects of Foreign Direct Investment into Korea and Some Proposals on Improving the Investment Environment
Foreign direct investment (FDI) has been established as one of the main pillars of growth in the Korean economy since the 1997 financial crisis. However, the growth of FDI has slowed to a virtual halt recently. In particular, glob..
June Dong Kim et al. Date 2009.12.30
Regulatory reform, Foreign direct investmentDownloadContentSummaryForeign direct investment (FDI) has been established as one of the main pillars of growth in the Korean economy since the 1997 financial crisis. However, the growth of FDI has slowed to a virtual halt recently. In particular, global increases in FDI from 2003 to 2007 did not translate into growth in Korea, as FDI into Korea actually decreased during the same period. Even though FDI inflow met the target level in 2009, FDI growth into Korea has become stagnant, standing still between 10 to 12 billion US dollars since 2000.(The rest is omitted.) -
The Impacts of Enlargement on the Central and Eastern European Countries
The last and historic enlargement of the European Union by ten new countries has fundamentally changed the nature of the decades-long process of integration in Europe. , However, it is not only the enlargement but also the global ..
András Inotai Date 2009.12.24
Economic integration, Economic cooperationDownloadContentExecutive Summary
I. The Way to Membership
II. Why Membership?
III. Specific Features of the “Eastern” Enlargement
IV. Economic Impacts of Accession and Tasks of Successful Membership
V. Is There a Common Position of the CEECs in Key Integration Questions?
VI. Concluding Remarks
ReferencesSummaryThe last and historic enlargement of the European Union by ten new countries has fundamentally changed the nature of the decades-long process of integration in Europe. , However, it is not only the enlargement but also the global challenges and the unprecedented reform pressure accumulated both in some key member countries and on the level of Community policies that urge to reconsider the mission, priorities and basic instruments of European integration for the coming years and decades.
The paper deals with the process of enlargement, focusing on the negotiations and their consequences. It gathers arguments in favour of joining the European Union on the side of the new members. Moreover, it addresses traditional and new community policies that have to cope with the new challenges, starting from the decision-making process and the reforming of the common agricultural policy, through budgetary considerations to desirable new activities of the enlarged Union in economic, social and political areas. The author strongly argues for a quick and fundamental process of deepening the integration, as a major requirement of strengthening or just creating the global position of Europe in the next decades.
The analysis of the short-term impacts of enlargement, mainly on the economic development of the new members indicates that most of the fears did not appear, while expectations have mostly still to be fulfilled in the next years. This, however, needs a clear integration strategy in the accession countries and a not less clear pro-integration strategy on the level of the EU. This should include a changing mentality from status-quo towards future-oriented thinking and a shift from narrow-minded national positions towards the awareness and implementation of European priorities.
Although, and at first glance, the new members reveal similar features and are confronted with similar challenges in order to become successful members of the European integration, a more detailed survey indicates substantial differences not only in their economic structure and political interests but also in their level of preparation and, even more importantly, in their capacity to absorb the positive and negative shocks connected with membership. Based on these considerations, it is hardly conceivable that the Central and Eastern European countries would form a cohesive and strong lobby within the enlarged Union. Excepting the efforts to redistribute and perhaps restructure the EU budget, their interests are likely to lead to the formation of different strategic and tactical alliances within the enlarged Community.
This paper is organized in the following order: first it reviews the most important stages of relations between the CEECs and the European integration (Chapter I), followed by the key arguments for membership (Chapter II). Chapter III deals with the most significant features of enlargement. Shorter and longer-term impacts of enlargement and tasks of successful membership are analyzed in Chapter IV. Chapter V tries to identify areas in which the CEECs may develop a common position within the enlarged EU. Chapter VI sums up the arguments and presents some concluding remarks.