• Journal of Distribution Science
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• v.15 no.12
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• pp.41-51
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• 2017

Purpose - This study proposes the impact of the US and Korean economic policy uncertainty on macroeconomy, and its effect on Korea. The economic policy uncertainty index of the US and Korea is used to represent the economic policy uncertainty on Korean economy. Research design, data, and methodology - In this paper, we collect the eight variables to find out the interrelationship among the US and Korean economic policy uncertainty index of the US and macroeconomic indicators during 1990 to 2016, and use Vector Error Correction Model. Result - The distribution industry stock index in Korea is influenced by the economic policy uncertainty index of the US rather than of Korea. All variables are related negatively to the economic policy uncertainty index of the US and Korea from Vector Error Correction Model. This study shows that the economic policy uncertainty index of the US and Korea has the dynamic relationships on the Korean economy. Conclusions - A higher economic policy uncertainty shows a greater economy recession of a country. Finally, the economic policy uncertainty of the Korea has an intensive impact on Korea economy. Particularly, the economic policy uncertainty of the US has a strong impact on distribution industry stock market in Korea.

• East Asian Economic Review
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• v.22 no.1
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• pp.29-54
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• 2018

Using the indicators of economic policy uncertainty developed by Baker et al. (2016), this paper investigates the effects of the US economic policy uncertainty on the Korea economic uncertainty as well as Korea-US foreign exchange risk. The key findings are that: (i) the degree of spillovers of policy uncertainty from the US to Korea is considerable but not comparatively high; (ii) the US policy uncertainty plays a stronger and more consistent role in Korean currency risk than Korea policy uncertainty and other macro variables. It implies that the economic policy uncertainty in the US is an important contributor to Korea-US exchange rates.

• Journal of Korea Trade
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• v.24 no.4
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• pp.1-17
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• 2020

Purpose - Since China has been South Korea's biggest export destination, uncertainty shocks originating from it would influence South Korea's exports. This paper evaluates the effects of China's economic policy uncertainty on Korea's exports to explore the transmission channels. Design/methodology - Incorporating endogeneities and nonlinearities, this study employs a quarterly time-varying parameters vector autoregressive model to investigate the relationships between China's economic policy uncertainty and Korea's exports, where the overparameterization due to time-varying specifications is overcome by a novel stochastic model specification search framework. According to previous theoretical studies, this paper assesses two channels, demand shock channel and exchange rate channel, through which foreign uncertainty affects Korea's exports. This paper identifies the primary drivers of Korea's aggregate exports and analyzes the rationales for the time-variant impacts of China's economic policy uncertainty on Korea's exports to China. Findings - Our empirical results reveal that Korea's aggregate exports are less responsive to China's economic policy uncertainty shocks and significantly move together with global demand. In contrast, its bilateral exports to China are highly responsive in a negative and time-variant way. Moreover, Chinese investment is an important channel through which China's economic policy uncertainty affects Korea's exports to China after 2010. Further, the time-variant effects of China's economic policy uncertainty on Korea's exports to China are related to changes in China's foreign trade policies, global economic conditions, and China's degree of economic freedom. Originality/value - Few previous studies touch the effects of external uncertainty shocks on South Korea's exports. This paper attempts to fill this gap and explicitly investigate the impacts of China's economic policy uncertainty on Korea's exports from a time-varying perspective. As Korea is an export-oriented economy, this study provides insights for the Korean government to understand the transmissions of external uncertainty better.

• The Journal of Fisheries Business Administration
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• v.40 no.1
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• pp.153-172
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• 2009

Developing foreign fishing ground executed in various uncertainty such as fishing price, oil price, exchange rate. But traditional economic evaluation method, CVP(Cost-Volume-Profit) analysis doesn't consider uncertainty of foreign fishing ground. So we need new approach about economic evaluation that can take into account uncertainty. This study focus on the economic evaluation about experimental survey of tuna fishing grounds in the north pacific ocean by sensitive analysis and simulation. The results of the economic evaluation can be summarized as follows. First, when we take it for granted that the other uncertainty factors except for each fishing price, oil price, and exchange rate are constant. CVP gross sales has positive relation to the increasing rate of oil price, exchange rate(W/$) and negative relation to the increasing rate of fishing price and exchange rate(W/${\yen}$). Second, when we are supposing that fishing price, oil price, and exchange rate are followed. the probability of less than CVP gross sales is A ship(48.87%), B ship(49.64%), C ship(50.55%). Consequently, the economic evaluation by sensitive analysis and simulation is more useful tool than CVP(Cost-Volume-Profit) analysis under uncertainty.

• Environmental and Resource Economics Review
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• v.29 no.2
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• pp.145-170
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• 2020

This study analyzes the dependence structure between energy (crude oil, natural gas, coal) prices and economic (real and financial) uncertainty. Summary of the results of the dependence structure between energy prices and economic uncertainty analysis is as follows. First, the results of model selection show that the BB7 copula model for the pair of crude oil price and economic uncertainty, the Joe copula model for the pair of natural gas price and economic uncertainty, and the Clayton copula model for the pair of coal price and economic uncertainty were chosen. Second, looking at the dependency structure, it showed that the pair of energy (crude oil, natural gas, coal) prices and real market uncertainty show positive dependence. Whereas, the only pair of financial market uncertainty-crude oil price shows positive dependency. In particular, crude oil price was found to have the greatest dependence on economic uncertainty. Third, looking at the results of tail dependency, the pair of real market uncertainty-crude oil price and pair of real market uncertainty-natural gas price have an asymmetric relationship with the upper tail dependency. It can be seen that the only pair of financial market uncertainty-crude oil represents asymmetric relationships with the upper tail dependencies. In other words, combinations with asymmetric relationships have shown strong dependence when negative extreme events occur. On the other hand, tail dependence between economic uncertainty and coal price be not found.

• Industry Promotion Research
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• v.8 no.2
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• pp.11-19
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• 2023

The purpose of this study is to analyze the effect of economic uncertainty on business innovation. To this end, Ahir et al. (2018) World Uncertainty Index (WUI) is selected as a proxy for economic uncertainty, while total R&D investment (RD), capitalized R&D investment (RD_A), expensed R&D investment (RD_E), and the proportion of capitalized R&D investment to total R&D investment (RD_R) are selected as variables representing business innovation. The research findings showed that economic uncertainty (WUI) had a statistically significant positive (+) relationship with total research and development investment (RD), asset-based research and development investment (RD_A), and the proportion of asset-based research and development investment (RD_R). This relationship remained the same even after controlling for managerial opportunistic accounting behavior (DACC; discretionary accruals). These findings suggest that companies focus on research and development investment as an opportunity for management innovation even in the face of economic uncertainty. The results of this study are significant in demonstrating the validity and effectiveness of government support for industrial promotion under economic uncertainty.

• Journal of Korea Trade
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• v.27 no.5
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• pp.153-166
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• 2023

Purpose - This research empirically analyzes the influence of economic policy uncertainty and free trade agreements (FTAs) on bilateral trade volumes between Korea and its trading partners. The study investigates whether fluctuations in the Economic Policy Uncertainty Index (EPUI) for both Korea and its trading partners significantly impact trade volumes and whether the implementation of FTAs mitigates these effects. Design/methodology - The study employs dynamic panel data analysis using the system generalized method of moments (system GMM) estimation method to achieve its research objectives. It utilizes country-month-level panel data, including the EPUI, trade volume between Korea and its trading partner countries, and other pertinent variables. The use of system GMM allows for the control of potential endogeneity issues and the incorporation of country-specific and time-specific effects. Findings - The analysis yields significant results regarding the impact of economic policy uncertainty on Korea's exports and imports, particularly before the implementation of FTAs. An increase in the EPUI of trading partners leads to a notable increase in Korea's exports to them. Conversely, an increase in Korea's EPUI negatively affects its imports from trading partners. However, post-FTA implementation, the influence of each country's EPUI on trade volume is neutralized, with no significant difference observed. Originality/value - This research contributes to the existing literature by providing empirical evidence on the interaction effects between economic policy uncertainty and FTAs on bilateral trade volumes. The study's uniqueness lies in its examination of how FTAs mitigate the impact of economic uncertainty on trade relations between countries. The findings underscore the importance of trade agreements as mechanisms to address economic risks and promote international trade relations. In a world where global market uncertainties persist, these insights can aid policymakers in Korea and other countries in enhancing their trade cooperation strategies and navigating challenges posed by evolving economic landscapes.

• Journal of Korea Society of Industrial Information Systems
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• v.29 no.2
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• pp.191-204
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• 2024

This study analyzes the effects of manufacturing firms' R&D investment on sales according to global political economic uncertainty. The variables in this research include the firm's R&D investment, sales, which serves as an indicator of the firm's performance, and the Global Economic Policy Uncertainty (GEPU) index, which reflects situations of global political economic uncertainty. Panel data analysis is conducted by using a total of 96 quarters of data spanning 24 years from 2000 to 2023 based on manufacturing firms in the Wharton Research Data Services' Compustat Database. We study the impact of firm's R&D investment on sales by considering the Global Economic Policy Uncertainty index, which was relatively underestimated in previous research, as moderating variable, and present a new direction for research by analyzing the time lag effect. We suggest effective R&D investment strategy for firms.

• Journal of Korea Trade
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• v.23 no.7
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• pp.128-146
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• 2019

Purpose - The purpose of this paper is to investigate the relationship between internal control, economic policy uncertainty, and performance of cross-border merger and acquisition (M&A) based on the panel data of Chinese listed firms. The authors expected that internal control has a positive moderating effect on the performance of cross-border M&A and that it mainly occurs during periods when economic policies are relatively stable. In addition, the authors tried to find out the mechanism of internal control affecting cross-border M&A and the corporate performance. Design/methodology - The authors tested the hypotheses by a multivariate regression model based on the panel data of Chinese listed firms from 2009 to 2017. The dependent variable is the change value of business performance (DROA_1,2,3) and the explanatory variables are cross-border M&A (MA), China's uncertainty of economic policy (EPU), and internal control level (IC) respectively. Findings - The authors find that internal control has a positive moderating effect on the relationship between cross-border M&A and corporate performance. Further, the authors find that the moderating effect is more significant in state-owned enterprises and that it mainly occurs during periods when economic policies are relatively stable. Originality/value - This paper is the leading study that tries to analyze empirically the relationship between internal control, economic policy uncertainty, and performance of cross-border M&A. It provides a new avenue through which internal control might reasonably mitigate the risks of cross-border M&A and correspondingly improve the performance of cross-border M&A. It also confirms the moderating effect of internal control on the performance of cross-border M&A under the uncertainty of economic policy.

• Journal of Industrial Convergence
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• v.20 no.2
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• pp.11-19
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• 2022

This study examines the role of economic uncertainty in stock price determination in the domestic stock market. To this end, we analyzed the relationship between economic uncertainty indices at home and abroad (USA, China) and stock returns for non-financial companies in Korea from January 2000 to 2017. For the analysis model, the 3-factor model of Fama and French (1992) and the 5-factor model including momentum and liquidity were used. As a result of the analysis, a portfolio with a high beta of economic uncertainty showed higher stock returns than a portfolio with a low beta. This was the same as the US analysis result. Also, the analysis results using the US uncertainty index were more significant than the regression analysis results using the Korean economic uncertainty index.