WORKING PAPERS
Export Competition and Innovation NEW Version! (Under review)
FREIT-EIIT 2022 Best Graduate Student Paper, 10th West Coast Trade Workshop Best Graduate Student Paper
Abstract: How does the rise of China affect innovation of firms in other countries through export competition, which means competition in third markets? A multi-country model developed in this paper predicts that only high-productivity firms increase innovation facing tougher competition with China. The model also suggests a possibility that innovation could be more responsive to export competition than to import competition. South Korean patent data confirm these predictions using a novel firm-level measure of export competition. Notably, export competition in markets where Korea outpaces China and in countries with higher income plays a more important role in Korean firm’s innovation.
Knowledge Spillovers from Public Sector: Evidence from Innovation Cities in South Korea NEW! (Under review)
Abstract: This paper investigates knowledge spillovers from public sector facilitated by regional development policies focusing on South Korean Innovation City project, which relocated public agencies from Seoul to provincial regions. Detailed patent data is employed to distinguish the direct impact from spillovers, to measure the precise magnitude of shocks, and to examine the scope of spillovers. Additionally, a winner-loser comparison is conducted to mitigate potential endogeneity concerns. The empirical findings reveal increased innovation in Innovation Cities, driven both by direct and spillover effects. Importantly, spillovers are stronger in already innovative regions and limited to technologically close fields and geographically proximate regions.
Product Scope Adjustment to the China Shock: Competition at Home and Abroad
(with Jaerim Choi, Seongin Hong, and Jung Hur)
Abstract: How does the rise of China affect the product scope of exporters that compete with Chinese firms both at home and abroad? Korean administrative plant-level data reveal that export competition in third markets, in addition to import penetration in the domestic market, contracts the product scope. Dissecting product scope adjustment further, we uncover that export competition dampens the creation of new products, whereas import penetration precipitates the destruction of existing products. Moreover, import-induced product destruction reallocates resources toward core products. We propose disproportionate importance of domestic market, a forward-looking aspect of product creation, and creative destruction as potential drivers.
The Labor Share in General Equilibrium (draft available upon request)
(with Robert Feenstra)
Abstract: The decline of the labor share in GDP has been widely recognized not only in the United States but also in other countries around the world. However, economists have not reached on a consensus on the source of the change. We develop a general equilibrium model with non-CES preferences, occupational choice of ex-ante identical individuals, and the heterogeneous productivity of firms that explores the fiscal origin of the decline. The model suggests that (i) corporate-friendly fiscal policy decreases the labor share; and (ii) the labor share declines more when the entry of firms is restricted. This is because rigid entry adjustment prevents new entrants from entering the market, resulting in weaker competition between firms.
FREIT-EIIT 2022 Best Graduate Student Paper, 10th West Coast Trade Workshop Best Graduate Student Paper
Abstract: How does the rise of China affect innovation of firms in other countries through export competition, which means competition in third markets? A multi-country model developed in this paper predicts that only high-productivity firms increase innovation facing tougher competition with China. The model also suggests a possibility that innovation could be more responsive to export competition than to import competition. South Korean patent data confirm these predictions using a novel firm-level measure of export competition. Notably, export competition in markets where Korea outpaces China and in countries with higher income plays a more important role in Korean firm’s innovation.
Knowledge Spillovers from Public Sector: Evidence from Innovation Cities in South Korea NEW! (Under review)
Abstract: This paper investigates knowledge spillovers from public sector facilitated by regional development policies focusing on South Korean Innovation City project, which relocated public agencies from Seoul to provincial regions. Detailed patent data is employed to distinguish the direct impact from spillovers, to measure the precise magnitude of shocks, and to examine the scope of spillovers. Additionally, a winner-loser comparison is conducted to mitigate potential endogeneity concerns. The empirical findings reveal increased innovation in Innovation Cities, driven both by direct and spillover effects. Importantly, spillovers are stronger in already innovative regions and limited to technologically close fields and geographically proximate regions.
Product Scope Adjustment to the China Shock: Competition at Home and Abroad
(with Jaerim Choi, Seongin Hong, and Jung Hur)
Abstract: How does the rise of China affect the product scope of exporters that compete with Chinese firms both at home and abroad? Korean administrative plant-level data reveal that export competition in third markets, in addition to import penetration in the domestic market, contracts the product scope. Dissecting product scope adjustment further, we uncover that export competition dampens the creation of new products, whereas import penetration precipitates the destruction of existing products. Moreover, import-induced product destruction reallocates resources toward core products. We propose disproportionate importance of domestic market, a forward-looking aspect of product creation, and creative destruction as potential drivers.
The Labor Share in General Equilibrium (draft available upon request)
(with Robert Feenstra)
Abstract: The decline of the labor share in GDP has been widely recognized not only in the United States but also in other countries around the world. However, economists have not reached on a consensus on the source of the change. We develop a general equilibrium model with non-CES preferences, occupational choice of ex-ante identical individuals, and the heterogeneous productivity of firms that explores the fiscal origin of the decline. The model suggests that (i) corporate-friendly fiscal policy decreases the labor share; and (ii) the labor share declines more when the entry of firms is restricted. This is because rigid entry adjustment prevents new entrants from entering the market, resulting in weaker competition between firms.
PUBLICATIONS
Corporate Lobbying on U.S. Positions toward the World Health Organization: Evidence of Intensification and Cross-Industry Coordination
(with Katheryn Russ, Phillip Baker, and David McCoy)
Global Health Governance, 2022
What You Don’t Know About the Codex Can Hurt You: How Trade Policy Trumps Global Health Governance in Infant and Young Child Nutrition
(with Katheryn Russ, Phillip Baker, Michaela Byrd, Rizki Nauli Siregar, Hammad Zahid, and David McCoy)
International Journal of Health Policy and Management, 2021
Breastfeeding, first-food systems transformations and corporate power: a synthesis of literature and data on the market and political practices of the transnational baby food industry
(with Phillip Baker, Katheryn Russ, David McCoy, Thiago M. Santos, Paulo A. R. Neves, Julie Smith, Gillian Kingston, Mark Lawrence, Benjamin Wood, Melissa Mialon, David Clark, Katherine Sievert, Monique Boatwright, and Rob Moodie)
Globalization and Health, 2021
Dissecting the Effects of Terms of Trade Shocks on Korean Economy
(with Jinho Choi and Joonyoung Hur)
Emerging Markets Finance and Trade, 2017
Analysis of Causes of Widening Income Gap between Households and Corporations
(with Byeongmook Sung and Hyunman Kim)
Bank of Korea Monthly Bulletin, Dec 2014 (in Korean)
(with Katheryn Russ, Phillip Baker, and David McCoy)
Global Health Governance, 2022
What You Don’t Know About the Codex Can Hurt You: How Trade Policy Trumps Global Health Governance in Infant and Young Child Nutrition
(with Katheryn Russ, Phillip Baker, Michaela Byrd, Rizki Nauli Siregar, Hammad Zahid, and David McCoy)
International Journal of Health Policy and Management, 2021
Breastfeeding, first-food systems transformations and corporate power: a synthesis of literature and data on the market and political practices of the transnational baby food industry
(with Phillip Baker, Katheryn Russ, David McCoy, Thiago M. Santos, Paulo A. R. Neves, Julie Smith, Gillian Kingston, Mark Lawrence, Benjamin Wood, Melissa Mialon, David Clark, Katherine Sievert, Monique Boatwright, and Rob Moodie)
Globalization and Health, 2021
Dissecting the Effects of Terms of Trade Shocks on Korean Economy
(with Jinho Choi and Joonyoung Hur)
Emerging Markets Finance and Trade, 2017
Analysis of Causes of Widening Income Gap between Households and Corporations
(with Byeongmook Sung and Hyunman Kim)
Bank of Korea Monthly Bulletin, Dec 2014 (in Korean)