In Korea, workers must receive a full day's pay when they work over 15 hours a week. This study leverages this regulation to estimate the impact of minimum wage increases on labor market outcomes, exploiting a sharp discontinuity in the minimum wage rule at 15 hours worked (i.e., regression discontinuity designs) based on a longitudinal panel dataset. The estimation results reveal that, in response to the hourly wage jumping by 20 percent at the discontinuity, Korean employers seek to reduce their labor costs by cutting employees' working hours to avoid paying statutory holiday pay instead of laying them off.
Incorporating the excess burden of taxation into a mixed duopoly to evaluate privatization, we analyze Bertrand competition between the public and private firms producing goods of different qualities. We show that (i) when the only private (resp. public) firm offers high quality, privatization (resp. mixed duopoly) is desirable if the excess burden of taxation is sufficiently large, and vice versa. This implies that the government's role in implementing privatization goes in the opposite direction; (ii) if the excess burden of taxation is intermediate, privatization is preferable regardless of the public firm's quality.
This study investigates the indirect environmental impact of geopolitical risk through global value chain (GVC) participation. Using Structural Equation Modeling, it estimates how global geopolitical risk affects CO2 emissions via disruptions in GVCs across 52 countries from 2001 to 2020. Results show that geopolitical risk reduces GVC participation, which raises emissions in developed economies but lowers them in developing ones. The contrasting effects reflect differences in countries' positions within global value chains in terms of carbon-intensive activities and the stringency of environmental regulations across country groups. The findings highlight GVCs as a critical mediating channel linking geopolitical instability to environmental outcomes.
This study extends the Porter hypothesis by adopting a cross-border approach because, in a hyper-globalized economy, the impact of foreign policies might diffuse across borders through international trade. We examine the cross-border spillover effects of foreign environmental policies on innovation and economic growth of other countries. Using a countryyear panel dataset, our study empirically finds that environmental policy spillovers contribute to improving green innovations, total factor productivity, and gross domestic product growth of other countries, which implies the borderless effect of the Porter hypothesis.
We investigate the utilization of financial information by the central government and policymakers for budget cuts under unprecedented fiscal pressure caused by COVID-19 in South Korea. Previous research (Helden, 2016; Raudla and Savi, 2015) strongly suggests the possibility that, owing to several reasons including time pressure, constrained analytical capabilities, and the political nature of the budgetary process, financial information might not be used for budget reductions under unprecedented fiscal strain. However, we find that financial information, which is simple but provides useful information to identify the progress of government projects, is utilized for budget cuts even under such fiscal stress.
