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29422. Factors Influencing ASEAN FDI and the Policy Implications
- Author:
- Jeong Hyung-Gon
- Publication Date:
- 06-2017
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Since the global economic crisis triggered in the United States in 2008, the East Asian economic region has received particular attention as it achieved relatively solid economic growth compared to developed countries, which struggled with recession. The discussion on economic cooperation and economic liberalization within East Asia has mainly focused on the RCEP, with this discussion being led by ASEAN as it calls for ASEAN centrality. ASEAN is currently the second-largest overseas investment destination and second-largest trading partner for South Korea, making it an important partner in economic cooperation for South Korea. Particularly, as China is openly implementing economic retaliatory measures against South Korea for the deployment of THAAD missiles in the nation, South Korea has become more interested in the ASEAN market as it strives to diversify its trade and investment portfolio. Under this background, this research examines the characteristics of ASEAN FDI by income level and doing business conditions, then conducts an empirical analysis of determination factors to draw policy implications for stronger economic cooperation with ASEAN.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Asia
29423. The Effect of Restructuring on Labor Reallocation and Productivity Growth: An Estimation for Korea
- Author:
- Choi Hyelin, Kim Subin, and Jung Sung Chun
- Publication Date:
- 09-2017
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Productivity is considered one of the most important factors for economic growth. Total productivity grows through technological progress or realloca-tion of resources. This paper analyses their contribution to economic growth for total economy and by sectors. The main finding is that economy-wide increases but this is mainly due to internal technological improvements. On the one hand, inter-sector reallocation of labor negatively contributes to eco-nomic growth as employment moves to service sectors with low productivity. Further, when looking at the sectoral-level productivity growth, both internal and external restructuring make positive contributions to aggregate economic growth. However, internal technological progress and reallocation of employment appear to similarly contribute to the sectoral-level economic growth in the manufacturing sector, whereas internal restructuring makes a larger contribution to economic growth in the service sector. This suggests that there is more room for reallocation of resources to contribute to the productivity growth in service sectors. Therefore, the productivity growth of the service sector would foster economy-wide productivity and it can be achieved by the mitigation of misallocation of resources in service sectors.
- Topic:
- International Political Economy and International Affairs
- Political Geography:
- Asia
29424. Anatomy of the Trade Collapse, Recovery, and Slowdown: Evidence from Korea
- Author:
- Lee Sooyoung
- Publication Date:
- 06-2017
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- The last decade of the world trade has been marked by an unprecedented collapse, quick recovery, slowdown, another drop, and recovery. To study cyclical and structural aspects of the recent trend of trade, I use both aggregate and disaggregated trade statistics of a small open economy, South Korea, whose economic success and growth have been heavily dependent on exports. The aggregate trend of the country is surprisingly similar to that of the world, which is why the trend of Korea's export is called a proxy for the world. I show that while the last drop of trade after 2015 has cyclical aspects, there is evidence that the continued slowdown from 2012 is structural: (1) the so-called `China factor' is found in the analysis of trade-income elasticity of the world and China for imports from Korea. (2) The bilateral trade barriers between Korea and its important trading partners are universally tightening. I also show that the firm sizes, destination countries, and the mode of transactions affect disaggregated trade flows during the slowdown periods. It is advisable to diversify main export products to lower the effect of oil prices on export prices and to strengthen the cooperation with ASEAN countries, whose trade barriers have exceptionally diminished throughout the last decade.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Asia
29425. Investment Puzzle: Deeper Roots
- Author:
- Kim Sujin
- Publication Date:
- 05-2017
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- Even at near-zero interest rates for a prolonged period since the financial crisis, why has business investment in advanced economies remained persistently below its pre-crisis level? This paper investigates empirically the roots of this investment puzzle from the global megatrend perspective. The empirical model of this study augmented the uncertainty-finance accelerator investment model with megatrend variables of a transition to service industry, ageing population and a rise in income inequality. The main estimation results show that they have affected negatively the business investment over the period 1980-2014. The shift-to-service driven investment fall is the price-dominant effect during the transition, which is not necessarily pessimistic news, while the suppressing effects from ageing and a rise in income inequality require adequate policy reactions. In addition, the analysis finds significant negative spillover effects of trade partners' ageing and income inequality on a country's own private investment. Based on the empirical results, I expect that the G20’s efforts in inclusiveness with structural reforms will stimulate global business investment.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Asia
29426. Determinants and Consequences of Corporate Social Responsibility: Evidence from the Revision of the Company Act in India
- Author:
- Lee Woong
- Publication Date:
- 04-2017
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- India is the first country to introduce mandatory CSR spending for eligible firms, based on the revision of the Companies Act in 2013. In this paper, I explore the effects of the revision of the Companies Act in India on the likelihood of a firm's CSR participation and its profit. It is the first work to investigate the effects of the provision of mandatory CSR. The results show that the revision increased the eligible firms' CSR incurrence by 2.3 percentage points, compared to ineligible firms. The findings also indicate that the revision is effective to increase the eligible firms' profits by 3.5 percent, compared to the ineligible firms. Therefore, I suggest that profit-maximizing CSR and private provision of public goods through mandatory CSR are valid in India.
- Topic:
- International Political Economy and International Affairs
- Political Geography:
- Asia
29427. East Asia’s Regional Financial Governance: Assessing Korea’s Centrality
- Author:
- Ramon Pacheco Pardo
- Publication Date:
- 09-2017
- Content Type:
- Research Paper
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- In the aftermath of the Global Financial Crisis, the multilayered international financial governance regime has been strengthened. In East Asia, this regime includes an ASEAN+3 regional layer designed to complement – rather than replace – the global layer. This regional layer has three goals: crisis prevention, crisis management and resolution, and market strengthening. The Chiang Mai Initiative Multilateralization (CMIM), ASEAN+3 Macroeconomic Research Office (AMRO), and Economic Review and Policy Dialogue (ERPD) are the key institutions in the areas of crisis prevention, management, and resolution. South Korea has become increasingly central to this regional financial governance regime over the past few years. Seoul was crucial to the setting up of CMIM, holds top management positions in AMRO, and is involved in the ERPD dialogue process. Three key reasons explain Korea’s centrality
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Korea
29428. A View from China on Triangular Relations
- Author:
- Wang Dong and Sun Bingyan
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- What will it take to jump start trilateral talks among Beijing, Seoul, and Washington over the situation on the Korean Peninsula, including the denuclearization of North Korea? If this subject has been on the minds of South Koreans in 2016-17 with some approaching their counterparts in Beijing and Washington, DC in the hope that such triangular talks can be launched—the more official, the better—not many Chinese have addressed what would be necessary to enlist their country in this endeavor. This chapter argues that, at present, China is unprepared to take this route. A major factor is the sense that there are imbalances that complicate the triangle. Beyond the substance of what would be on the agenda, Chinese are concerned by South Korea’s alignment and how it would affect the course of the discussions.
- Topic:
- International Relations and International Affairs
- Political Geography:
- China, America, and Korea
29429. Establishing triangular talks among Washington, Beijing and Seoul
- Author:
- Gilbert Rozman
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- Of five alternative approaches to addressing the North Korean threat to stability in East Asia and beyond, this section is concerned with the possibility of just one—a diplomatic approach via Three-Way Talks among China, South Korea, and the United States. We single out this approach as the golden mean for reconciling the conflicting interests among the parties best positioned to reshape the calculus of Pyongyang. It represents the path to compromise. Among the alternatives, there is the Chinese appeal for a dual-track approach through Six-Party Talks, aimed at a peace treaty on terms attractive to North Korea and greatly transformative to the security architecture in Northeast Asia. This could hardly be called a compromise, since Seoul and Washington regard this as a win for Pyongyang and evidence that Beijing actually has been siding with Pyongyang. Another alternative is Strategic Patience, which is a misnomer for the policy of the Obama administration, but, in any case, refers mainly to reliance on increased deterrence as pressure is ratcheted up. In fact, Obama was seeking a pathway to three-way talks, giving China time to shift in that direction bolstered by new sanctions, while in 2016 also moving closer to a fourth approach: Unilateral Sanctions targeted at the Chinese firms assisting North Korea. A fifth option is Alliance Triangularity to force change in Pyongyang.
- Topic:
- Diplomacy, International Cooperation, and International Security
- Political Geography:
- Asia
29430. A View from South Korea on Sino-ROK Relations
- Author:
- Kim Heung-kyu
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- Although we are only into the first months of the Trump administration, many Koreans recognize that the U.S.-led, market-oriented, liberal international order has been severely shaken. In the background, the rapid rise of China and rather successful economic reforms under Xi Jinping have dramatically reduced its vulnerability and sensitivity to the United States. As one power’s grip is shaken and another’s is energized, two different orders are emerging in East Asia. We accordingly witness a “Clash of Titans,” the fallout from which could be fatal to the security and economy of the Republic of Korea.
- Topic:
- International Political Economy and International Affairs
- Political Geography:
- Asia
29431. A View from the United States on Sino-U.S. Relations
- Author:
- Joel Wuthnow
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- During the 2016 U.S. presidential campaign, the candidates reached a bipartisan consensus on one issue: how to deal with North Korea. Hillary Clinton and Donald Trump both called for China to do more to convince Pyongyang to abandon its nuclear program once and for all. Candidate Trump said that China has “absolute control” over North Korea and promised to do whatever it takes to convince Beijing to use that leverage, including imposing penalties on Chinese firms. As president, however, Trump will have to navigate the reality of China’s extreme hesitance to use the only type of pressure likely to divert North Korea’s nuclear ambitions—the threat of regime-endangering punishment. If and how China should continue to fit into U.S. strategy for dealing with North Korea will thus be a key issue facing Trump and his advisors
- Topic:
- International Relations and International Affairs
- Political Geography:
- Korea
29432. A View from the United States on ROK-U.S. Relations
- Author:
- Mark Tokola
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- For the proverbial visitor from Mars, the political situation in Northeast Asia is inexplicable. Sitting amidst a group of relatively stable, wealthy, and powerful countries, is a small, poor, belligerent nation that all agree is a threat to regional stability. Furthermore, the rogue state has been sanctioned and its behavior condemned by the United Nations for its weapons programs and its human rights abuses. Why can the Republic of Korea (ROK), Japan, the United States, Russia, and China not combine their considerable leverage to do something about North Korea?
- Topic:
- International Relations and International Affairs
- Political Geography:
- Korea
29433. The Impact of Chinese Identity on Bilateral relations
- Author:
- Gilbert Rozman
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- The construct “Chinese national identity” refers to narratives from China’s leadership, media, and academic spokespersons about what makes their country distinctive and how those ideas matter in relations with other nations. This is a relational concept that serves to distinguish the “self” and “other,” whose interpretation is shaped by interactions with other states. Seen from the vertical dimension of identity, these interactions are filtered through rhetoric aimed at promoting unity at home. Demonizing other nations while conveying an image of enemies or states seeking to contain China is a means to boost solidarity behind Communist Party control over a society with little means to dissent. The horizontal dimension of identity depicts bilateral relations as the result not of different national interests, but of clashing and often irreconcilable identities. Examining the way national identity on the Chinese side impacts five external relationships is the objective of this set of articles, which concentrate on Chinese rhetoric during the period of Xi Jinping.
- Topic:
- International Relations and International Affairs
- Political Geography:
- China
29434. The Impact of Chinese National Identity on Sino-Japanese Relations
- Author:
- Yinan He
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- Sino-Japanese relations have been in another volatility cycle since the Diaoyu/Senkaku Islands disputes flared up again in summer 2012. The downward trend seems to have bottomed out in November 2014 when the two leaders Xi Jinping and Abe Shinzo finally held their first meeting since entering office. However, the anticipated recovery has proved tenuous; the momentum toward further improvement has halted since early 2016 when confrontation escalated in both the South China Sea and East China Sea. While acknowledging the role of realist power shift and geostrategic rivalry in causing Sino-Japanese tension, this paper argues that a widening gap between their national identities is also highly relevant. The current Xi government has promoted a national reinvigoration campaign emphasizing Chinese history and culture, the socialist model, and defense of core interests, which runs counter to that of Abe’s Japan, a democratic and historically revisionist country. This national identity conflict has exacerbated mutual distrust, denied chances of reassurance, and generated domestic popular objections to diplomatic compromise between the two countries.
- Topic:
- International Relations and International Affairs
- Political Geography:
- Japan, China, and Korea
29435. The Impact of Chinese National Identity on Sino-South Korean Relations
- Author:
- See-Won Byun
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- How do Chinese national identity narratives affect Sino-South Korean relations? The Koguryo history war more than a decade ago was a turning point in bilateral relations since diplomatic normalization in 1992, generating enduring competition over representations of history. In 2010, China’s commemoration of its entry into the Korean War raised early warnings in South Korea over Beijing’s hostile foreign policy orientation under Xi Jinping. Contrary to such expectations, however, the earliest summit agreements between presidents Xi Jinping and Park Geun-hye after both took office in 2013 were on history cooperation as common victims of Japanese colonialism. Most notably in 2015, Park’s participation in Beijing’s 70th anniversary celebrations of the end of World War II consolidated joint claims of what was called the best period in bilateral relations. This chapter assesses the impact of Chinese national identity on China-Republic of Korea (ROK) relations under the Xi and Park administrations since 2013. It examines Chinese constructions of national identity and their implications for the security, economic, and cultural dimensions of the Sino-South Korean relationship. Rather than promoting partnership, competing identities across these dimensions reinforce enduring differences over the region’s political, economic, and cultural order. These differences surfaced most saliently in 2016, following an initial period of engagement that corresponds with the downward trend in China-Japan relations since 2012. Managing them requires the very trust-building that both Beijing and Seoul have prioritized since 2013.
- Topic:
- International Relations and International Affairs
- Political Geography:
- Korea
29436. The Impact of Chinese National Identity on Sino-ASEAN Relations
- Author:
- Danielle Cohen
- Publication Date:
- 08-2017
- Content Type:
- Working Paper
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- China and ASEAN possess tremendous opportunities for economic cooperation, but also face significant security challenges, particularly regarding the South China Sea. In both domains, China’s national identity has greatly influenced the trajectory of the bilateral relationship. China’s ASEAN policy is characterized by a desire to recreate the Sinocentric structures of the tributary system, a belief in the historical legitimacy of China’s maritime and territorial claims, a vision of China as a global economic powerhouse, and a sense that China has already “peacefully risen” and can more actively assert itself to reap the rewards.
- Topic:
- International Relations and International Affairs
- Political Geography:
- China
29437. U.S-Rok economic relations left uncertain amid leadership changes
- Author:
- Gilbert Rozman
- Publication Date:
- 08-2017
- Content Type:
- Special Report
- Institution:
- Korea Economic Institute of America (KEI)
- Abstract:
- While the other parts of this book bring China fully into the coverage—diplomacy, national identities, and sanctions—here we narrow the focus on U.S.-ROK relations with an eye to the current uncertainty about the future of the KORUS FTA, the five-year old bilateral trade agreement. Donald Trump has assumed the presidency critical of trade imbalances in goods, including assertions about the negative impact of the FTA with South Korea. It appears that the U.S. side will insist on renegotiating the agreement. In order to assess what this could mean, we take a close look at what the impact of KORUS has been and at how the debate in Washington has been unfolding under Trump’s watch. The three chapters were written in the early spring of 2017; so they could capture only the initial impact of Trump at a time when South Korean leadership was paralyzed between impeachment and the election of a new president without any serious bilateral engagement over economic issues. Yet, as tensions over economics are expected to rise, our objective is to inform the discussion with relevant economic background and with awareness of what Trump has been saying and how it may shape the political debate.
- Topic:
- International Cooperation and International Affairs
- Political Geography:
- America and Korea
29438. Myanmar: Justice sector reform must include local dispute resolution
- Author:
- Helene Maria Kyed
- Publication Date:
- 03-2017
- Content Type:
- Policy Brief
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- In Myanmar, ordinary citizens prefer to have crimes and disputes resolved within their village or neighborhood. There is a clear preference for avoiding conflict escalation, rather than punishing perpetrators. The official courts are seen as places to avoid whenever possible. They are mistrusted, associated with high costs, and many feel intimidated by them due to fear of authority and formality. Reforming the official judiciary is important in Myanmar, but even if the courts functioned according to international standards, there would still be a demand for local forms of dispute resolution focused on reconciliation and negotiated settlements. This is due to culturally and religiously informed perceptions of problems and injustices, related to shame, fate and Buddhist beliefs in past life deeds. This policy brief by Helene Maria Kyed argues that any support to justice sector reform in Myanmar should include already existing local dispute resolution mechanisms and take local perceptions of justice serious, rather than alone focus on the official judiciary and international rule of law principles. It is important to base programming on inclusive dialogues about justice at the local level, and invest in building trust and gaining context-specific knowledge.
- Topic:
- Conflict Resolution, Ethnic Conflict, and International Affairs
- Political Geography:
- Myanmar
29439. European anti-migration agenda could challenge stability in Niger
- Author:
- Hans Lucht
- Publication Date:
- 06-2017
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- Without a stable Libya to strike migration deals with, EU is looking further south, to Niger, as a way of cutting off the trans-Saharan migration routes. However, the question is whether the EU is exchanging short-term gains for long-term stability?
- Topic:
- International Affairs
- Political Geography:
- Europe and Niger
29440. Rebooting the Franco-German engine: Two post-election scenarios
- Author:
- Fabrizio Tassinari and Sebastian Tetzlaff
- Publication Date:
- 06-2017
- Content Type:
- Policy Brief
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- The election of pro-European Emmanuel Macron as president of France has reignited hopes that the so-called Franco-German engine, providing political impetus to European integration in the past decades, might be revived. While Macron’s election proved a rebuke to the populist challenge, it remains to be seen whether and how it will manage to rebalance the partnership with Berlin, which is overwhelmingly premised on Germany’s growing strength and clout at the European level. While pronouncing herself supportive of the new course in Paris, Chancellor Angela Merkel, like the rest of Europe, remains in a wait-and-see position regarding the ability of President Macron to fulfil his ambitious pro-EU agenda.
- Topic:
- International Affairs
- Political Geography:
- Europe