Narrow Your Choices

Refine By Countries

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Business and Economics > Finance: General

You are looking at 1 - 10 of 329 items for :

  • Type: Journal Issue x
  • Korea, Republic of x
Clear All Modify Search
Cover Selected Issues Papers
Korea in a Changing Global Trade Landscape: Korea
Hua Chai
and
Hyeryoun Kim
The global trade landscape is being reshaped by geoeconomic fragmentation and the rise of industrial policies. This paper studies the impact of these trends on the export-oriented Korean economy. It documents both positive and negative effects of U.S.-China trade tensions, technology and supply chain restrictions, and industrial policies of major economies on Korea's trade and FDI, particularly that of its strategic sectors. To navigate the changing global trade landscape, Korea needs to focus on promoting innovation to maintain competitiveness, diversifying export destinations and supply chains, and expanding exports of services.
Keywords:
trade policy; industrial policy; geoeconomic fragmentation; innovation; U.S.-China trade tension; Korea export share; U.S.-China trade relation; Korea's export; export destination; Exports; Trade tensions; Competition; Manufacturing; Tariffs; Global; North America
Cover Policy Papers
Central Bank Digital Currency: Progress And Further Considerations
International Monetary Fund. Monetary and Capital Markets Department
The paper briefs the Executive Board on the further considerations on CBDC. These cover the positioning of CBDC in the payments landscape, cyber resilience of the CBDC ecosystem, CBDC adoption, CBDC data use and privacy protection, implications for monetary policy operations, and cross-border payments with retail CBDC.
Keywords:
Capacity development; CBDC; Central bank digital currencies; Adoption; Collaboration; Cross-border payments; Cyber resilience; Data use and privacy protection; Monetary operations; Payment systems; Positioning CBDC; CBDC data; CBDC system; CBDC adoption; CBDC design; data use; position CBDC vis-à-vis; Digital financial services; Monetary base; Global
Cover Technical Notes and Manuals
The Case for (and Against) Asset Management Companies in Banking Crises
Miguel A Otero Fernandez
,
Jaime Ponce
,
Marc C Dobler
, and
Tomoaki Hayashi
This technical note explores the advantages and disadvantages of establishing state-sponsored centralized asset management companies (AMCs) to address high levels of bank asset distress during financial crises. AMCs may offer potential benefits like mitigating downward price spirals or achieving efficiency gains by consolidating creditor claims and scarce expertise. However, significant risks and costs warrant careful consideration. These include extreme uncertainties in asset valuation and substantial operational and financial risks. Past international experiences highlight the dangers of underestimating these risks, potentially turning the AMC into a mechanism for deferring losses to taxpayers, rather than minimizing them, and ultimately increasing long-term public costs and moral hazard. This technical note emphasizes these trade-offs and discusses crucial design elements for effective AMCs: a clear mandate, transfer pricing that prudently reflects asset values and disposal costs, strong governance with independent management, and efficient operational processes promoting transparency and accountability.
Keywords:
Asset Management Company (AMC); Bank resolution; Financial Crisis; Financial regulation and supervision; Problem Asset Resolution; Non-performing Loans; Bank restructuring.; asset price spiral; centralized asset management companies; give borrower; AMC need; AMC debt; bank asset distress; resolution strategy; recovery value; asset characteristic; Asset management companies; Distressed assets; Nonperforming loans; Asset valuation; Loans; Global
Cover IMF Working Papers
Sovereign Green Bonds: A Catalyst for Sustainable Debt Market Development?
Gong Cheng
,
Torsten Ehlers
,
Frank Packer
, and
Yanzhe Xiao
In traditional bond markets, sovereign bonds provide benchmarks and serve as catalysts for the corporate bond market development. Contrary to the usual sequence of bond market development, sovereign issuers are latecomers to sustainable bond markets. Yet, our empirical study finds that sovereign green bond issuance can have quantitative and qualitative benefits for the development of private sustainable bond markets. Our results suggest that both the number and the size of corporate green bond issuance increase more in a jurisdiction after the sovereign debut. The results are more pronounced in countries with stronger climate policies. Sovereign green bond issuance also improves the quality of green verification standards in the corporate bond market more generally, consistent with the aim of fostering third-party reviews and promoting best practice in green reporting and verification. Finally, our work provides evidence that the sovereign debut increases liquidity and diminishes yield spreads of corporate green bonds in the same jurisdiction.
Keywords:
Green bonds; sustainable bonds; sovereign debt; taxonomies; green verification; bond market development; bond issuance; corporate bond bond market; issuance increase; sustainable bond markets; Climate finance; Corporate bonds; Sovereign bonds; Securities markets; Bond yields; Global; East Asia
Cover IMF Working Papers
The Pitfalls of Protectionism: Import Substitution vs. Export-Oriented Industrial Policy
Reda Cherif
and
Fuad Hasanov
Industrial policies pursued in many developing countries in the 1950s-1970s largely failed while the industrial policies of the Asian Miracles succeeded. We argue that a key factor of success is industrial policy with export orientation in contrast to import substitution. Exporting encouraged competition, economies of scale, innovation, and local integration and provided market signals to policymakers. Even in a large market such as India, import substitution policies in the automotive industry failed because of micromanagement and misaligned incentives. We also analyze the risk tradeoffs involved in various industrial policy strategies and their implications on the 21st century industrial policies. While state interventions may be needed to develop some new capabilities and industries, trade protectionism is neither a necessary nor a sufficient tool and will most likely be counterproductive.
Keywords:
Industrial policy; export orientation; import substitution; growth; diversification; innovation; technology; import substitution policy; D. export orientation; risk tradeoff; policies in India; Policy strategy; Exports; Manufacturing; Imports; Tariffs; Competition; Global; Caribbean; North America
Cover IMF Working Papers
In Search of the Origin of Original Sin Dissipation
Bada Han
,
Jangyoun Lee
, and
Taehee Oh
In this paper, we examine how, contrary to the ‘original sin’ hypothesis, emerging market economies have gained the ability to borrow abroad in their local currency. We empirically analyze the relationship of various economic variables with local currency debt and identify three crucial conditions for the capacity to borrow in local currency: institutional quality, sufficient depth in the domestic bond market, and adequate performance in inflation targeting. While shares in JPMorgan Government Bond Index-Emerging Markets (GBI-EM) index also appear to be influential, the associations with local currency debt is less clear. We conduct a similar empirical analysis on portfolio equity, which represents a safer form of external liability than foreign currency debt, and verify that the depth of the equity market plays a key role in attracting foreign capital to domestic equity markets. Finally, we propose a simple portfolio model based on the inelastic market hypothesis to explain the positive correlation between capital market depth and the dissipation of original sin, which refers to the presence of more external liability in the form of equity or local currency debt. In essence, our analysis suggests that emerging market economies with reasonably strong fundamentals are not necessarily reliant on foreign currency debt.
Keywords:
Original Sin; Local Currency Debt; Emerging Markets; FX Market liquidity; annex C. optimal portfolio; equity original sin dissipation indices; equity portfolio investment; equilibrium portfolio determination; growth regression; Securities markets; Currency markets; Currencies; Currency crises; Global
Cover IMF Working Papers
Financial Stress and Economic Activity: Evidence from a New Worldwide Index
Hites Ahir
,
Mr. Giovanni Dell'Ariccia
,
Davide Furceri
,
Mr. Chris Papageorgiou
, and
Hanbo Qi
This paper uses text analysis to construct a continuous financial stress index (FSI) for 110 countries over each quarter during the period 1967-2018. It relies on a computer algorithm along with human expert oversight and is thus easy to update. The new indicator has a larger country and time coverage and higher frequency than similar measures focusing on advanced economies. And it complements existing binary chronologies in that it can assess the severity of financial crises. We use the indicator to assess the impact of financial stress on the economy using both country- and firm-level data. Our main findings are fivefold: i) consistent with existing literature, we show an economically significant and persistent relationship between financial stress and output; ii) the effect is larger in emerging markets and developing economies and (iii) for higher levels of financial stress; iv) we deal with simultaneous causality by constructing a novel instrument—financial stress originating from other countries—using information from the text analysis, and show that, while there is clear evidence that financial stress harms economic activities, OLS estimates tend to overestimate the magnitude of this effect; (iv) we confirm the presence of an exogenous effect of financial stress through a difference-in-differences exercise and show that effects are larger for firms that are more financially constrained and less profitable.
Keywords:
Financial stress; text analysis; country reports; continuous indicator; country and firm economic activity.; firm economic activity; effect of FSI; financial crises episode; Financial soundness indicators; Banking crises; Reserve requirements; Global financial crisis of 2008-2009; Global
Cover IMF Working Papers
The Rise of the Walking Dead: Zombie Firms Around the World
Bruno Albuquerque
and
Roshan Iyer
We build a new dataset of listed and private nonfinancial zombie firms for a large set of Advanced Economies and Emerging Markets over the last two decades. We find that the share of these unproductive and unviable firms has been rising worldwide, especially since the GFC and the Covid-19 pandemic. We show that, perhaps surprisingly, the incidence of zombification is lower among private firms. Lower average survival rates of private firms may explain this phenomenon. We find important negative macrofinancial spillovers from zombie firms: nonzombies’ financial performance is persistently reduced in industries populated with a greater number of zombies. To mitigate these effects, we document that countries with stronger banks, and tighter macroprudential policies tend to have fewer zombies and stronger nonzombies. Strengthening the banking sector may, however, not be sufficient if insolvency frameworks are not well-prepared to deal with the restructuring or insolvency of firms.
Keywords:
Zombie firms; Listed and private firms; Corporate investment; Congestion effects; Macroprudential policies; Panel data; zombie firm; nonfinancial zombie firm; insolvency framework; unviable firm; insolvency of firm; Financial statements; Countercyclical capital buffers; Solvency; Credit; Employment; Global
Cover Finance & Development
Finance and Development, June 2023
International Monetary Fund. Communications Department
In this issue, we focus on the forces disrupting the established international trade order, such as Russia’s war on Ukraine and geopolitical fragmentation. We also look at how global trade is being reshaped by technology and policy priorities, such as climate change and equality.
Keywords:
commonwealth member; trade openness; policy choice; trade volume; commonwealth nation; Aging; Exports; Export restrictions; Global; Caribbean
Cover IMF Working Papers
Productivity and Product Markets in Korea: Evidence from Advanced Economies
Mr. Andrew J Swiston
and
Stella Tam
This paper constructs an industry-level dataset of productivity across advanced economies, showing that Korea’s labor productivity and total factor productivity levels are below the median of other advanced economies. We identify sizable industry-level productivity gaps in Korea with respect to the global frontier, especially in market-oriented services. Using the OECD’s Product Market Regulation (PMR) Indicators, we show that tighter PMRs slow industry-level productivity growth, and these effects occur across all areas of PMRs—state control, barriers to entrepreneurship, and barriers to trade and investment—and through several detailed indicators. These effects are transmitted through higher product prices and unit labor costs of industries exposed to regulation. The results confirm the potential for Korea to boost overall productivity and growth through PMR reforms, especially by lowering barriers in service and network sectors, reducing restrictions applying to trade and investment, and evaluating the scope of government involvement in the economy.
Keywords:
Korea; productivity; product markets; regulation; growth; labor productivity distribution; OECD product market regulation; regulation-productivity linkage; OECD PMR indicators structure; IMF Product Market Regulation; PMR indicator; productivity comparison; productivity measurement; Total factor productivity; Commodity markets; Labor productivity; Trade barriers; Global