• Journal of Korea Trade
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• v.26 no.6
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• pp.1-19
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• 2022

Purpose - This study empirically investigates the effects of Official Development Assistance (ODA) on the economic activities of private actors in recipient countries. As a proxy for the economic activities of private actors, we utilize the job creation activities of foreign subsidiaries in recipient countries. The foreign subsidiaries provide a foundation for economic development by creating paying jobs. That is, if ODA has been successfully transferred to foreign subsidiaries, then these foreign subsidiaries should help economic growth and help create a boom in the local market by providing jobs. These jobs eventually lead to the achievement of the primary aims of foreign aid, including poverty reduction. Thus, this study empirically examines the relationship between ODA and the number of jobs created by foreign subsidiaries in recipient countries. Design/methodology - This is the first study to examine the effects of the ODA on the job creation of foreign subsidiaries because it has been hard to obtain internal information related to the employment status of foreign subsidiaries. Fortunately, we have a unique panel dataset provided by the Export-Import Bank of Korea (KEXIM) for 2006 to 2013. In terms of the empirical specification, we use the generalized least squares (GLS) method. The panel GLS estimator allows us to have an efficient estimation that overcomes the limitations of the panel data. It employs assumptions about the heteroscedasticity between the panels and makes an autocorrelation of the error term within each panel. Findings - We find that ODA influences job creation in foreign subsidiaries. In particular, we found that ODA creates more jobs in sales than in managerial or production positions. This study also shows that the effect of the ODA on the foreign subsidiaries' job creation activities depend on the purpose of the ODA. By examining ODA effects on the foreign subsidiaries' economic activities (e.g., job creation), this study fills a gap in the current literature. Originality/value - Existing studies that focus on the ODA effect have either a macroeconomic point or a microeconomic point of view. However, both approaches do not explain how well foreign aid has influenced private economic actors of recipient countries. In essence, previous researchers found it difficult to obtain the necessary data for internal employment status from foreign subsidiaries. However, thanks to the Korea Export-Import Bank, this study shows that ODA indeed influences the job creation activities of foreign subsidiaries even after controlling for other factors such as FDI, GDP growth rate, employment rate, household expenditure, mother firms' share, etc. By doing so, we can examine how ODA influences the job creation of foreign subsidiaries, which might help economic development and reduce the amount of poverty in recipient countries.

• The Korean Journal of Applied Statistics
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• v.28 no.6
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• pp.1047-1061
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• 2015

Stratified random sampling is a powerful sampling strategy to reduce variance of the estimators by incorporating useful auxiliary information to stratify the population. Sample allocation is the one of the important decisions in selecting a stratified random sample. There are two common methods, the proportional allocation and Neyman allocation if we could assume data collection cost for different observation units equal. Theoretically, Neyman allocation considering the size and standard deviation of each stratum, is known to be more effective than proportional allocation which incorporates only stratum size information. However, if the information on the standard deviation is inaccurate, the performance of Neyman allocation is in doubt. It has been pointed out that Neyman allocation is not suitable for multi-purpose sample survey that requires the estimation of several characteristics. In addition to sampling error, non-response error is another factor to evaluate sampling strategy that affects the statistical precision of the estimator. We propose new sample allocation methods using the available information about stratum response rates at the designing stage to improve stratified random sampling. The proposed methods are efficient when response rates differ considerably among strata. In particular, the method using population sizes and response rates improves the Neyman allocation in multi-purpose sample survey.