• The Journal of Asian Finance, Economics and Business
• /
• v.9 no.2
• /
• pp.141-149
• /
• 2022

Despite the importance of the insurance business for financial and economic development, few studies have looked at the factors that influence its growth. This research adds to the body of knowledge by empirically examining the impact of numerous factors on the development of the insurance business in 15 Middle East and North African (MENA) countries from 2000 to 2017. The study looks at macroeconomic, demographic, and institutional factors as potential drivers of the insurance industry's growth, with the insurance premium as a percentage of GDP as the dependent variable. All variables are stationary at the first difference, according to the IPS panel unit root test. The Pedroni residual cointegration test, Kao residual cointegration test, and Johansen-Fisher panel cointegration tests are then used to look for long-run associations. The cointegration tests strongly suggest that the insurance premium and the various variables have long-run correlations. Findings from the Fully-Modified OLS imply that GDP per capita, gross capital formation, and the KOF economic globalization index have a positive long-term impact on the insurance business. The insurance business is also driven by combating corruption and the rule of law. The population and regulatory quality, on the other hand, have no significant impact.

• Journal of Korea Trade
• /
• v.24 no.8
• /
• pp.63-80
• /
• 2020

Purpose - Recent empirical studies have shown that FDI is expected to be strongly associated with democratic governance, political stability, and sound macroeconomic conditions of the host country. We attempt to take it a step further to see if governments implement a major change in institutional characteristics, will the institutional reform toward better governance have a substantive effect in enhancing FDI inflows. This paper thus aims to analyze the importance of good governance as an important factor in the attractiveness of FDI inflows in ASEAN+3 (Korea, China, Japan) countries. Design/methodology - To determine the effects of good governance on FDI inflows across ASEAN+3 countries recorded between 1996-2018, the Worldwide Governance Indicators (WGI) are used to investigate the impact of good governance on FDI inflows. The model has been estimated by using fixed effects to show the robustness of the results. Findings - Our main findings can be summarized as follows: Political Stability, Rule of Law, and Voice and Accountability have a statistically significant impact on the inflow of FDI in the ASEAN+3 Countries, especially for Korean economy. Moreover, GDP growth continue to exert their positive influence. However, Regulatory Quality, Government Effectiveness and Control of Corruption, though equally important, are insignificant to attract FDI inflows. The key finding is that good governance has a significant impact on inward FDI in the ASEAN+3 countries. Originality/value - Existing studies focus on the impact of political factors on FDI across countries. This paper instead attempts to investigate which type of good governance is the most important in promoting FDI inflows across ASEAN+3 countries, which is essential for multinationals to consider when choosing a foreign site as a possible FDI destination.

• KDI Journal of Economic Policy
• /
• v.28 no.1
• /
• pp.193-218
• /
• 2006

This paper examines the macroeconomic structural differences of the free floating exchange rate regime and the managed float exchange rate regime focusing on the Korean economy, and compares it to the two benchmark economies, Japan and Australia. Korea's shift to the free floating exchange rate regime from the managed float exchange rate regime came after the 1997 economic crisis. Korea's exchange rate policy provides a unique opportunity to study the different behaviors or roles, if any, of managed float and free floating exchange rate regimes. Based on a simple monetary model, we find that the exchange rates of Korea are more sensitive to the economic fundamentals under the free floating regime than under the managed float regime. Impulse response analysis shows that exchange rate pass-through into domestic variables, especially inflation rate, has a bigger short-term impact under the floating regime than under the managed regime. This finding is consistent with the view that the managed (or fixed) regime provides the domestic price stability necessary for the economic growth for the developing countries.

• The Journal of Asian Finance, Economics and Business
• /
• v.8 no.10
• /
• pp.109-117
• /
• 2021

This study investigates the effects of FDI and other macroeconomic variables on Total Factor Productivity (TFP) in selected ASEAN+3 countries from 1981 till 2016. Total Factor Productivity (TFP) for each ASEAN+3 country was constructed using the Malmquist productivity index method. Then, a panel ARDL framework (dynamic heterogeneous panel), namely Pooled Mean Group (PMG), Mean Group (MG), and Dynamic Fixed Effect (DFE) are employed in examining the effects of FDI and other controlling variables on TFP. The new findings show that FDI has a significant and positive impact on TFP in the long run and the short run in ASEAN+3 countries. Besides, the results also reveal that in the long run, other variables such as the average number of years of schooling and the ratio of high-skilled to low-skilled labor also have a significant and positive effect on TFP. However, economic openness, government expenditure on R&D, and interaction between countries and FDI have a negative and significant impact on TFP. These findings implied that the recipient countries must ensure their political stability and offer various incentives to attract more investors. Furthermore, the influx of foreign investors, especially large ones and lower costs, should be encouraged by each country as FDI inflows can boost their TFP growth.

• Korea Real Estate Review
• /
• v.28 no.3
• /
• pp.53-64
• /
• 2018

OECD countries have been stimulating private pensions instead of public pensions because the financial stability of public pensions has been threatened by the aging population. Korea, which has the fastest aging population in the world, has been following the recommended policies of major countries. Unlike major economies, however, most of Korea's household assets are composed of real estate assets. Due to the economic and social importance of real estate assets in Korea, the wealth effect of real estate has been used as a major tool in macroeconomic policy. This study analyzed the effect of real estate value changes on the contribution of private pensions (personal pension + retirement pension). Utilizing a two-way, fixed effect model with the balanced panel data of the National Survey of Tax and Benefit, empirical results presented that the private pension contribution increased by 0.171% when the value of real estate increased by 1%. Thus, real estate value changes were analyzed as positive for retirement preparation through private pension. These results suggested that if the real estate market would shrink in the future, consumption would decrease, and the degree of preparation for retirement might be smaller.

• Journal of the Korea Academia-Industrial cooperation Society
• /
• v.15 no.8
• /
• pp.4863-4873
• /
• 2014

The Korean construction industry has played a major role among all industries despite its relative small ratio of all. The global economic crisis, however, has adversely affected the construction industry. Therefore, the Korean government implemented a corporate restructuring process to ensure the stability of the financial market. The selection standard on workout enterprises by the government is based on two perspectives: (1) external factors, including macroeconomic indices and (2) internal factors, including financial statements of private enterprises. On the other hand, if considering the characteristics of the construction industry, a certain construction company may not be evaluated only by its financial statements. In other words, a valuation process that utilizes the financial statements only can be concluded to be irrational. Accordingly, this study aims to provide the valuation model, which embraces the characteristics of workout firms, and determines their implications. To accomplish this, each enterprise valuation was measured using DCF and Black Scholes models, and by comparing such results with their market value, each enterprise was determined to be either under or over-valued. The results of this study verified that the valuations of 2 workout companies (out of 4) showed a higher value than the market value.

• Hwankyungkyoyuk
• /
• v.4 no.1
• /
• pp.89-211
• /
• 1993

The Korean government embarked upon ambitious economic development plans in the 1960's the goals of development policy at that time were the elimination of absolute poverty and the alleviation of unemployment. With scant natural resources, the government had to push for industrialization based upon borrowed foreign raw materials with surplus local labor. Preoccupation with the economic goals of industrialization and export expansion left little room for considering environmental protection. It is evident that Korea's exported industrialization strategy of the past three decades has been a success in terms of income, production, and other macroeconomic indicators, but it cannot be denied that a host of undesirable side-effects have been created. These include environmental problems. congestion in several large cities, poor wealth distribution, and regional disparities. The environmental problems were recognized even in the early stage of development, but preoccupation with the pending economic goals of industrialization and export expansion left little room for considering environment protection. The perceived and actual seriousness of the problems, however, has reached such a level that further negligence may imperil political stability and developmental problems facing the world arise from a world economic order characterized by ever expanding consumption and production, which exhausts and contaminates natural resources and creates and perpetuates gross inequalities between and within nations. It will be necessary to develop new culture and ethical values, transform economic structures, and reorient, our lifestyles. Changing lifestyles can not be promoted by government policy initiative alone but through self=generated educational efforts and mutual training by people themselves. The citizens group for environment (NGOs) should assume these educational and training responsibilities starting from grass-root level of people. It must be reawakened to the reality that the environmental preservation for better quality of life is based on the development of human relationships, creativity, spirituality, reverance for the natural world and celebration of life, and is not dependent upon increased consumption of non-basic material goods. To carry on such environment education social movements and NGOs should (1) provides educational methodologies, which focus on values clarification and moving beyond clarification and moving beyond blame to constructive action. (2) provide training for leaders of business and industry, government, union and others on consumption and production. (3) initiate and support the training and work of environmental counselor who encourage responsible consumption. (4) cooperative with media to initiate and strengthen educational programs on the social environmental programs on the social environmental impacts of consumption and production and to build awareness of consumer responsibility and potential. Economic and social development can be compatible with environment protection : both can be achieved simultaneously. Effective environmental management depends on the various factors : political will, institutional arrangements, appropriate legislation, and availability of the requistite financial and technological resources, which is possible with a strong public awareness of the importance of environmental preservation.

• Journal of the Korea Society for Simulation
• /
• v.32 no.4
• /
• pp.69-76
• /
• 2023

To improve the financial stability of the National Pension, an appropriate target rate of return should be established based on pension liabilities, and asset allocation policies should be formulated accordingly. The purpose of this study is to calculate the target rate of return considering the contributions of subscribers and the pension benefits, and based on this, derive an asset allocation. To do this, we utilized the internal rate of return methodology to calculate the target rate of return for each cohort. And then, we employed a Monte Carlo simulation-based re-sampling mean-variance model to derive asset allocation for each cohort that satisfy the target rate of return while minimizing risks. Our result shows that the target rate of return for each cohort ranged from 6.4% to 6.85%, and it decreased as the generations advanced due to a decrease in the income replacement rate of the National Pension. Consequently, the allocation of risky assets, such as stocks, was relatively reduced in the portfolios of future generations. This study holds significance in that it departs from the macroeconomic-based asset allocation methodology and proposes investments from an asset-liability management perspective, which considers the characteristics of subscribers' liabilities.

• Journal of Intelligence and Information Systems
• /
• v.23 no.4
• /
• pp.127-146
• /
• 2017

Services using artificial intelligence have begun to emerge in daily life. Artificial intelligence is applied to products in consumer electronics and communications such as artificial intelligence refrigerators and speakers. In the financial sector, using Kensho's artificial intelligence technology, the process of the stock trading system in Goldman Sachs was improved. For example, two stock traders could handle the work of 600 stock traders and the analytical work for 15 people for 4weeks could be processed in 5 minutes. Especially, big data analysis through machine learning among artificial intelligence fields is actively applied throughout the financial industry. The stock market analysis and investment modeling through machine learning theory are also actively studied. The limits of linearity problem existing in financial time series studies are overcome by using machine learning theory such as artificial intelligence prediction model. The study of quantitative financial data based on the past stock market-related numerical data is widely performed using artificial intelligence to forecast future movements of stock price or indices. Various other studies have been conducted to predict the future direction of the market or the stock price of companies by learning based on a large amount of text data such as various news and comments related to the stock market. Investing on commodity asset, one of alternative assets, is usually used for enhancing the stability and safety of traditional stock and bond asset portfolio. There are relatively few researches on the investment model about commodity asset than mainstream assets like equity and bond. Recently machine learning techniques are widely applied on financial world, especially on stock and bond investment model and it makes better trading model on this field and makes the change on the whole financial area. In this study we made investment model using Support Vector Machine among the machine learning models. There are some researches on commodity asset focusing on the price prediction of the specific commodity but it is hard to find the researches about investment model of commodity as asset allocation using machine learning model. We propose a method of forecasting four major commodity indices, portfolio made of commodity futures, and individual commodity futures, using SVM model. The four major commodity indices are Goldman Sachs Commodity Index(GSCI), Dow Jones UBS Commodity Index(DJUI), Thomson Reuters/Core Commodity CRB Index(TRCI), and Rogers International Commodity Index(RI). We selected each two individual futures among three sectors as energy, agriculture, and metals that are actively traded on CME market and have enough liquidity. They are Crude Oil, Natural Gas, Corn, Wheat, Gold and Silver Futures. We made the equally weighted portfolio with six commodity futures for comparing with other commodity indices. We set the 19 macroeconomic indicators including stock market indices, exports & imports trade data, labor market data, and composite leading indicators as the input data of the model because commodity asset is very closely related with the macroeconomic activities. They are 14 US economic indicators, two Chinese economic indicators and two Korean economic indicators. Data period is from January 1990 to May 2017. We set the former 195 monthly data as training data and the latter 125 monthly data as test data. In this study, we verified that the performance of the equally weighted commodity futures portfolio rebalanced by the SVM model is better than that of other commodity indices. The prediction accuracy of the model for the commodity indices does not exceed 50% regardless of the SVM kernel function. On the other hand, the prediction accuracy of equally weighted commodity futures portfolio is 53%. The prediction accuracy of the individual commodity futures model is better than that of commodity indices model especially in agriculture and metal sectors. The individual commodity futures portfolio excluding the energy sector has outperformed the three sectors covered by individual commodity futures portfolio. In order to verify the validity of the model, it is judged that the analysis results should be similar despite variations in data period. So we also examined the odd numbered year data as training data and the even numbered year data as test data and we confirmed that the analysis results are similar. As a result, when we allocate commodity assets to traditional portfolio composed of stock, bond, and cash, we can get more effective investment performance not by investing commodity indices but by investing commodity futures. Especially we can get better performance by rebalanced commodity futures portfolio designed by SVM model.

• Journal of Distribution Research
• /
• v.17 no.2
• /
• pp.93-115
• /
• 2012

This study empirically examines the impact of changes in market shares among retailing types on the price index. The retailing type is classified into 6 groups: department store, big mart, super market, convenient store, specialty merchant, and on-line store. The market shares of retailing types are calculated by the ratio of each retailing type monthly sales to total monthly retailing sales in which total retailing sales is the sum of each retailing type sales. We employed several price indices: consumer price index (CPI), CPI for living necessaries, and fresh food price index. In addition, this study used fundamental price indices based on 25 product families as well as 42 representative products. The empirical model also included several variables in order to control for the macroeconomic effects and those variables are the exchange rate, M1, an oil price, and the industrial production index. The data is monthly time-series data spanning over the period from January 2000 to December 2010. In order to test for the stability of data series, we conducted ADF test and PP test in which the model and length of lag were determined by the relevant previous literature and based on the AIC. The empirical results indicate that changes in market shares among retailing types have impacts on the price index. Table A shows that impacts differ as to which price index to use and which product families and products to use. For department store, it lowers the price of food and non-alcoholic beverages, home appliances, fresh food, fresh and vegetables, but it keeps the price high for fresh fruit. The big mart retailing type has a positive impact on the price of food, nut has a negative effect on clothing and foot wear, non-food, and fresh fruit. For super market, it has a positive impact on food and non-alcoholic beverages, fresh food, fresh shellfishes, but increases the price of CPI for living necessaries and non-food. The specialty merchant retailing type increases the price level of CPI for living necessaries and fresh fruit. For on-line store type, it keeps the price high for CPI for living necessaries and non-food as well as fresh fruit. For the analysis based on 25 product families shows that changes in market shares among retailing types also have different effects on the price index. Table B summarizes the different results. The 42 representative product level analysis is summerized in Table C and it indicates that changes in market shares among retailing types have different effects on the price index. The study offers the theoretical and practical implication to these findings and also suggests the direction for the further analysis.