Effects of Stockholders’ Secondary Tax Liability on Corporate Investment / Jangwook Lee

This study analyzes the impact of secondary tax liability borne by stockholders, an exception to the principle of limited liability, on corporate investment. The paper constructs a model of a firm to examine the effect of this secondary tax liability, finding that the violation of limited liability increases firms’ expected bankruptcy costs, thereby reducing investments. By means of an empirical analysis, the paper examines whether firms with the largest shareholder stake exceeding 50%, the condition under which secondary tax liability is incurred, decrease their investments. The results show that firm investment is highly concentrated in observations of cases in which the largest shareholder stake does not exceed 50%. Investments decrease sharply in cases where the largest shareholder stake exceeds 50%. The results here provide implications pertaining to how exceptions of the limited liability principle, existing only in Korea, affect corporate investments.

A Theoretical Analysis of Public Procurement for Innovation / Sunjoo Hwang

This paper provides a new theoretical rationale for public procurement for innovation (PPI), a unique policy encouraging public procurers to purchase innovative products. In contrast to existing studies that primarily emphasize the advantages of PPI, this paper takes a comprehensive approach, examining both the costs and risks associated with PPI, alongside its benefits. It finds a general condition under which PPI outperforms traditional public procurement. Under this condition, this paper demonstrates that PPI enhances social welfare by facilitating optimal risk-sharing between public procurers and the general economy. Additionally, it draws policy implications from a comparative analysis between the current PPI policy in Korea and an optimal PPI policy.

New Indicators of Global Integration Using Input-Output Analysis / Dongseok Kim

The import content of export (ICE) has served as an indicator of global integration for several decades. It is defined as the share of imported products embodied in exports and can be interpreted as the relative degree of the utilization of global production network (GPN) over the domestic supply chain (DSC) in terms of ‘value-added.’ This paper proposes two new indicators of global integration. They are defined as the ratios of imports (foreign products) to gross output (domestic products) generated by exports and can be interpreted as the relative degrees of the utilization of GPN over DSC in terms of ‘production.’ Both indicators are easy to compute and can be compared between years, between countries, between industries, and between groups of industries. The paper applies the new indicators to the recent edition of the OECD’s Input-Output Database. Finally, the paper shows that the recent slowdown in international trade is mostly due to the decrease in the international trade of intermediate goods, with significant implications regarding the future of global integration.

Effects of Stockholders’ Secondary Tax Liability on Corporate Investment / Jangwook Lee
　Ⅰ. Introduction
　Ⅱ. Secondary Tax Liability
　Ⅲ. Model analysis
　Ⅳ. Estimation
　Ⅴ. Conclusion
　REFERENCES

A Theoretical Analysis of Public Procurement for Innovation / Sunjoo Hwang
　Ⅰ. Introduction
　Ⅱ. Model
　Ⅲ. Policy Implications
　Ⅳ. Concluding Remarks
　REFERENCES

New Indicators of Global Integration Using Input-Output Analysis / Dongseok Kim
　Ⅰ. Introduction and Motivation
　Ⅱ. Literature
　Ⅲ. New Indicators of Global Integration
　Ⅳ. Data and Empirical Results
　Ⅴ. Conclusion
　REFERENCES