Financial markets regulation: political accountability challenged

Heritier Adrienne 경희대학교 글로벌 통상·금융연구원 2023 International Trade, Politics and Development Vol.7 No.3

This paper aims to conceptualize and empirically illustrate the challenges that financial market regulation presents to politicians and the organization tasked with specifying regulations and supervising their implementation in the interest of users and consumers of financial instruments. It analyses the problem from the viewpoint of the governor's dilemma and the control/competence conflict, the linked problem of the rent-seeking of agents/intermediators and consumers of financial instruments. Political accountability problems are enhanced by the materiality of the technologies used, i.e. algo trading.The paper theoretically conceptualizes and empirically illustrates the argument.The paper finds that regulators of digitalized financial markets are faced with considerable problems and depend on private agents when regulating financial transactions. However, the new technological instruments also offer new possibilities for securing compliance.Further research should focus more in-depth on the cooperation between public and private actors in the specification and implementation of regulatory details. It should further investigate the conditions which allow regulators to use RegTech in the surveillance of financial firms.Since financial market transactions are opaque for most users, the creation of more transparency is crucial to hold regulators accountable in their activity of surveillance of financial firms. New algorithm-based technologies may lend important support in doing so.By linking the different analytical perspectives, i.e. the governor's dilemma vis-à-vis the intermediator or agent and the possible rent-seeking of intermediators, under the condition of a highly developed technology of financial transactions as well as the market structure, the paper offers new insights into the limits as well as new opportunities of regulating financial markets allowing for political accountability of regulators and financial firms.

Do trade flows interact in space? Spatial origin-destination modeling of gravity

Luo Shali,최승완 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.2

This study proposes spatial origin-destination threshold Tobit to address spatial interdependence among bilateral trade flows while accounting for zero trade volumes.This model is designed to capture multiple forms of spatial autocorrelation embedded in “directional” trade flows. The authors apply this improved model to export flows among 32 Asian countries in 1990.The empirical results indicate the presence of all three types of spatial dependence: exporter-based, importer-based and exporter-to-importer-based. After further considering multifaceted spatial correlation in bilateral trade flows, the authors find that the effect of conventional trade variables changes in a noticeable way.This finding implies that the standard gravity model may produce biased estimates if it does not take spatial dependence into account.This paper attempts to offer an improved model of the standard gravity model by taking spatial dependence into account.

Assessing the impact of technological progress on trade in COMESA: a PVECM approach

Fauzel Sheereen 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.2

The present study investigates the extent to which technological progress influences trade in the Common Market for Eastern and Southern Africa (COMESA) region over the period 1990–2017.Methodologically, this study uses a rigorous dynamic analysis namely a dynamic vector error correction model (PVECM) to carry out the proposed investigation. Such a procedure ensures that the dynamic behaviour under consideration is properly captured, while simultaneously catering for causality issues.The results show that technological progress has had a positive and significant effect on trade for the sample of countries in the COMESA region over the years of studies. Also, the long-run results show that local investment and economic growth have a positive impact on international trade. Furthermore, the short-run estimates allowed us to make further analysis of the results. For instance, it is observed that trade as well results in technological progress as per the study. Hence, there is reverse causation or bi-directional causality between trade and technological progress.Very few research studies have been conducted on the link between technological progress and trade in a macroeconomy. The analysis thus is believed to supplement the dwarf literature on the technological progress and trade nexus by bringing additional evidence from COMESA.

Trade openness relationship with macroeconomic factors on Saudi Arabian economy: ARDL application

Tarchoun Monaem,Ghraieb Ikram 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.3

This paper examines the relationship of financial market inclusion, economic growth, foreign direct investment and real output on trade openness for the Saudi Arabia Economy. Trade openness potentially is a major source of economic growth and development.This study is the first employing mixed methods and approaches of autoregressive distributed lag (ARDL) to estimate the long-run and short-run models for the Saudi Arabia Economy.The results indicate that the inclusion of financial markets has an important role in the short term and has an effect on trade openness on this economy.These results listed are only implications for decision-makers to achieve their objectives. Indeed, to have better economic growth, economic and financial decision-makers can rely on financial inclusion and trade openness.This article investigates an approach testing the relationship of variables in a short and long term by using annual data from 1990 to 2017 for the Saudi Arabia economy. This paper tests the relationship between finance and economy with an econometric model.

The Dragon's gift: an empirical analysis of China's foreign aid in the new century

Min Ye 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.2

The new century has witnessed rapid growth in China's foreign aid. However, there is still yet any consensus about the nature or the consequences of China's foreign aid. In this study, the author reviews the history of China's foreign aid and finds significant changes in China's foreign aid policy in the past seven decades.The author analyzes China's foreign aid data between 2000 and 2017 from the AidData program with a Tobit model.This study’s results show both the similarities and differences between China and Western donors. These “Chinese characteristics” in its foreign aid, we argue, illustrate China's dual identity in the new century: both the largest developing country that minds its own economic development and an emerging global power that aspires to elevate its global status and enhance its soft power.This article is, to the author’s knowledge, one of the first comprehensive empirical analysis of China's foreign aid using the data from AidData program. It will enrich our understanding of the nature and consequences of China's foreign aid in the new century.

The international business landscape: a look at paradigms, research gaps and new realities

Ntara Caroline 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.3

The purpose of this paper is to analyse international business (IB) scholarship and present current gaps and new realities to enhance scholarly discourse.The paper divides the scholarship into three distinct sections. First, it interrogates the changing definitions of the field from the 1880s to date. Secondly, IB paradigms are cross-examined while highlighting the understudied emerging interaction paradigm. Lastly, literature gaps, methodological gaps and new realities in IB are presented.This research shows that IB inquiry has concentrated on firm-level paradigms, leaving the emerging interaction paradigm understudied. As a result, there is a deficit of novel ideas and limited research on critical emerging issues affecting IB. Further, simplistic methodologies are prevalent, making IB scholarship weak. Additionally, a majority of studies concentrate on the Americas, Europe and Asia, leaving Africa understudied.This research augments the need for scholars to cross-examine the best approach to apply in IB discourse and presents gaps calling for new insights and future research directions.

Cross-border M&A, greenfield FDI and the onset of intrastate conflict, 1990–2015

Beuck Erik,Shuaibi Nourah,황원재 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.3

By examining the link between the two types of FDI and intrastate conflict from 1990 to 2015 in 138 countries, this paper intends to test the peace-through-FDI thesis.To empirically test the hypotheses, this study examines county-year observations from 1990 to 2015 for 138 countries. An instrumental variable method is utilized to this end.This paper shows that, while greenfield FDI generates pacifying effects on intrastate conflict, M&A investment is likely to promote the onset of intrastate conflict.Despite the extensive literature on FDI and the onset of intrastate conflict, many have approached FDI as a singular phenomenon, and have not broken it down into its constituent parts of greenfield and brownfield investment types. Theorizing that this practice had oversimplified and blurred the relationship of FDI on intrastate conflict onset, the authors pursued the collection of novel data in order to more completely distinguish between the two types of FDI. With this novel approach dividing FDI into its component parts, the authors break open the black box of FDI to empirically find out the extent of its diverse influence on the onset of intrastate conflict.

Making RealDolls regulation at the border work

이지수,이준희(Jun Hee Lee) 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.3

In an effort to reduce ambiguity around customs clearance of items deemed pernicious to public morality and present lessons for customs administration, this research aims to explore ways to improve customs clearance for RealDolls. Furthermore, by suggesting specific ideas to improve the process, this research also aims to contribute to the future customs clearance of socially controversial and legally ambiguous items.The authors have decided to review studies from ethical and legal perspectives to focus on the legislation and its enforcement issues. The literature review is designed to provide insights on how to incorporate legal and ethical reasoning in the customs clearance process for RealDolls. Supplementary interviews were also conducted with criminal lawyers and customs officials to obtain expert knowledge on domestic legislation and customs control against the sex toys industry.As a result of the study, it is found that a complete ban on RealDoll infringes on individuals' right to pursue happiness guaranteed by the Constitution and in most cases, cannot be implemented without loopholes. Therefore, it is suggested that the import regulation on RealDolls should be changed to the negative list system, which selectively disapproves certain RealDolls based on a list of RealDolls previously denied clearance by either the Supreme Court or the Customs Clearance Screening Committee. In addition, to have sufficient ethical and legal grounds, it is necessary to expand research on RealDolls regulation and actively introduce the process of obtaining social consensus.There has been little discussion on regulating RealDolls on the customs clearance level; no specific criterion exists except the public morality clause. This study is vital in that it reviews issues of RealDolls customs clearance from legal and ethical perspectives. Doing so also has a practical significance of providing implications for the customs policies regarding items deemed pernicious to public morality.

Asymmetric impact of real effective exchange rate changes on domestic output revisited: evidence from Egypt

Sharaf Mesbah Fathy,Shahen Abdelhalem Mahmoud 경희대학교 글로벌 통상·금융연구원 2023 International Trade, Politics and Development Vol.7 No.1

This paper investigates the asymmetric impact of the real effective exchange rate (REER) on Egypt's real domestic output from 1960 to 2020.A Nonlinear Autoregressive Distributed Lag (NARDL) model is utilized to isolate real currency depreciations from appreciations and account for the potential asymmetry in the impact of the REER. The analyses account for the various channels via which the REER could affect domestic output.Results show evidence of a long-run asymmetry in the output effect of REER changes in which only real currency depreciations have a contractionary impact on output, while the REER has no impact on output in the short run.The Egyptian monetary authority cannot rely on domestic currency depreciation as a policy instrument to boost domestic output.Unlike most of the previous studies, which assume linearity in the impact of the REER on output, we relax this assumption and hypothesize that the REER changes have an asymmetric effect on the Egyptian domestic output in Egypt. We use a long time span from 1960 to 2020 and control for the potential structural breaks in the REER-output nexus and the various channels through which the REER can affect domestic output.

A study on switching behavior of social media: from a dynamic perspective

강인원 경희대학교 글로벌 통상·금융연구원 2022 International Trade, Politics and Development Vol.6 No.3

The adoption of social media has been extensively discussed. However, to explain the adoption of traditional social media, considering the benefits and risks accumulated from the experiences of social media use, the extent literature is limited. Thus, this paper investigated the act of traditional social media users’ switching behavior from a dynamic perspective and the level of information privacy concerns and social media privacy to measure the risks and benefit accumulated from this dynamic process. This study of Facebook and Twitter users, who are regarded as representative of traditional social media, are selected as research targets surveyed and were required to answer a specially designed questionnaire in order to determine their general feeling on social media platforms they currently use. As a part of this process, quota sampling was used to collect different samples based on gender and age. In this paper, t -test, one-way ANOVA and multiple comparisons were used for the statistical analysis, conducted through SPSS. Information privacy concerns and social media dependency affect the adoption of social media. Secondly, social media dependency is a more salient determinant for social media adoption. Therefore, social media firms should pay more attention to enhancing user dependency of social media by increasing user involvement of social media.This study intends to conduct a research design that provides an overall and holistic understanding of user usage experience. To do this, it investigates the intensity of switching behavior through the level of dependency and the level of information privacy concern that users inevitably exhibit through the use of social media over long time.