• International Commerce and Information Review
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• v.11 no.3
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• pp.191-215
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• 2009

This study extends the previous research into the effects of knowledge spillovers on innovation and regional exports growth by more clearly distinguishing, both theoretically and empirically, two different types of knowledge spillovers, namely product and market knowledge spillovers. More importantly, this research provides insights on their role of knowledge spillovers in shaping regional innovative activities and, eventually, regional export growths. Furthermore, this research makes an important contribution to the understudied market knowledge spillovers by developing two variables that could be used to assess the flow of market knowledge spillovers at the regional level: localization economies and export consulting advice. Using secondary data on eight 2-digit manufacturing industries in ten New Zealand regions over a seven year period, this research found that regional competition, localization economies and the availability of export consulting advice have positively and significantly impact on the regional export growth in New Zealand.

• International Commerce and Information Review
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• v.2 no.1
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• pp.3-24
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• 2009

This study extends the previous research into the effects of knowledge spillovers on innovation and regional exports growth by more clearly distinguishing, both theoretically and empirically, two different types of knowledge spillovers, namely product and market knowledge spillovers. More importantly, this research provides insights on their role of knowledge spillovers in shaping regional innovative activities and, eventually, regional export growths. Furthermore, this research makes an important contribution to the understudied market knowledge spillovers by developing two variables that could be used to assess the flow of market knowledge spillovers at the regional level: localization economies and export consulting advice. Using secondary data on eight 2-digit manufacturing industries in ten New Zealand regions over a seven year period, this research found that regional competition, localization economies and the availability of export consulting advice have positively and significantly impact on the regional export growth in New Zealand.

• Journal of Korea Trade
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• v.23 no.2
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• pp.46-58
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• 2019

Purpose - This paper analyzes how Research and Development (R&D) cartelization and Research Joint Ventures (RJV) affect firms that engage in Cournot competition in their product market using a model in which the Home and Foreign firm produce differentiated products and export their total output to a third country's market. Design/Methodology - In a two-stage game, research expenditures incurred in the first stage improve product quality and are subject to various degrees of spillovers. We consider four different scenarios. Findings - In a symmetric equilibrium we observe the following: (i) an RJV that cooperates in R&D decision yields the highest R&D expenditure. However, the scenario which yields the lowest expenditure depends on the extent of differentiation between the goods and the degree of spillovers; (ii) RJV cartelization yields the highest product quality, output, and consumer surplus in the third country; however, the lowest is produced by R&D competition if spillovers are strong and by R&D cartelization if spillovers are weak; and (iii) each firm's profit is at its minimum in R&D competition and its maximum in RJV cartelization. Furthermore, if spillovers are strong, the profit of each firm in R&D cartelization is greater than that in RJV competition, and vice versa. Originality/value - By analyzing product innovation in international markets, we can find similarities and differences between process R&D and product R&D in international markets.

• East Asian Economic Review
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• v.20 no.2
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• pp.191-228
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• 2016

This paper analyzes the role of absorptive capacity in R&D spillovers through strategic R&D investments in a game-theoretic framework. In the model, a firm's effective R&D is composed of idiosyncratic R&D, which produces its own innovations, and identical R&D, which improves absorptive capacity. The model shows that in the presence of absorptive capacity firms have a tendency to underinvest (overinvest) in idiosyncratic (identical) R&D relative to the social optimum. As the spillover becomes larger, firms decrease their own R&D while they become more inclined towards strategic exploitation of rivals' efforts. Since the former effect overpowers the latter, the total amount of R&D decreases as the spillover increases. This is socially undesirable, providing a potential justification for a governmental subsidy for idiosyncratic R&D and a tax on identical R&D. The findings may have important implications for newly industrialized or emerging countries that consider a redirection of national R&D policy and intellectual property rights (IPR) regime.

• Korea Trade Review
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• v.41 no.2
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• pp.29-60
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• 2016

Research and Development(R&D) investment is an issue of central importance in any economy. In this paper we analyze the relationship between R&D spillovers and trade-related variables, using a two-stage model where duopolists simultaneously decide on R&D in the first stage and engage in Cournot competition in the second stage. We characterized and compared the free-trade and trade-restriction R&D equilibrium in a two-stage game of R&D investment followed by Cournot market competition. We also assessed the impact of varying the R&D spillover on the equilibrium outcomes and tariff. We showed for both free trade and protection cases that there exists a unique symmetric solution(subgame perfect Nash equilibrium). As the solution, while analytical, cannot be stated in closed form, we resorted to numerical experiments to investigate the equilibrium results. Our estimates indicate for both free trade and protection cases that the level of R&D investment and the rate of R&D expenditure decrease as the degree of R&D spillovers increases, and that there is an inverse relation between the degree of R&D spillovers and level of protection. The latter implies that the larger the degree of R&D spillovers, the lesser the level of protection.

• The Korean Journal of Financial Management
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• v.15 no.1
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• pp.73-94
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• 1998

This paper contributes to the ongoing controversy over price and volatility spillovers across countries by providing new evidence with the futures data of the S&P 500 and Nikkei 225 index futures contacts from January 3, 1990 to April 16, 1996. Based on the two-stage symmetric and asymmetric GARCH models we document that both the U.S. and the Japanese daytime returns significantly influence the subsequent overnight returns of the other market. We find no signs of volatility spillovers between two international markets with the symmetric model. However, with the asymmetric models, we find that the magnitude of foreign negative shocks are different from the positive ones. The findings generally suggest that the two markets are more sensitive to the bad news originating in the other market. This nature of transmission between two markets would have important implications to the arbitragers who are trying to exploit the short-term dynamics of price and volatility movements across two security markets.

• 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.

• East Asian Economic Review
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• v.16 no.2
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• pp.139-154
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• 2012

This paper provides a theoretical setup for an analysis of strategic relationships inherent to activities of an innovative multinational enterprise (MNE) and a local company in a host country. Additionally, we explore the incentives of the host country's government to provide subsidies to attract foreign direct investment (FDI) and to protect outcomes of R&D activities conducted by the MNE. We show that the MNE's commercial interests may collide with local companies' over protection of IPRs. Therefore, the extent of knowledge spillovers from the MNE to the local company and the magnitude of incentives to the MNE perform a crucial function in determining the optimal policy mix of IPR protection and FDI subsidies of the host country's government.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.19 no.5
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• pp.426-431
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• 2018

This study examines exchange rate volatility spillovers that affect the exchange rate volatility of Korean currency. For this study, the Japanese yen, British pound, Euro, and Canadian dollar are used as the currencies of developed countries, and the Thai baht, Indonesian rupiah, Singapore dollar, and Australian dollar are used as the currencies of the areas near Korea. The GARCH(1.1) model is employed for weekly data covering the period from January 2009 to December 2017. This study finds that the volatility spillovers from the Canadian dollar, Singapore dollar, and Australian dollar to the Korean won are significant, while the volatility spillovers from the Japanese yen, British pound, Euro, Thai baht, and Indonesian rupiah to the Korean won are insignificant. In terms of the economic system and structure, Japan, Britain, and European countries are at a higher level than Korea, while Thailand and Indonesia are at a lower level than Korea. Canada, Singapore, and Australia are almost at the same level as Korea. Therefore, these results appear to be derived from the phenomenon of exchange rate spillovers among countries with a similar economic system and structures, and contradict the literature, which has argued that exchange rates volatility spillovers occur among countries that are in the same area geographically.

• East Asian Economic Review
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• v.19 no.4
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• pp.357-379
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• 2015

We investigate interconnectedness and the contagion effect of default risk in Asian sovereign CDS markets since the global financial crisis. Using dynamic conditional correlation analysis, we find that there are significant co-movements in Asian sovereign CDS markets; that such co-movements tend to be larger between developing countries than between developed and developing countries; and that in the co-movements intra-regional nature is stronger than inter-regional nature. With the Spillover Index model, we measure contagion probabilities of sovereign default risk in CDS markets of seven Asian countries and find evidence of contagion effects among six of them; Japan is the exception. In addition, we find that these six countries are affected more by cross-market spillovers than by their own-market spillovers. Furthermore, a rolling-sample analysis reveals that contagion in the Asian sovereign CDS markets expands during episodes of extreme economic and financial distress, such as the Lehman Brothers bankruptcy, the European financial crisis, and the US-credit downgrade.