bluuebunny/crossref_metadata_2025 huggingface dataset:
Volatility Spillover Effects between Korean and German Stock Markets
Authors:   Asia-Europe Perspective Association, Kim Byoung Joon
Published: June 2018

In this study, mutual volatility spillover effects between stock markets of Korea and Germany have examined, using symmetric and asymmetric bivariate GARCH (generalized autoregressive conditional heteroscedasticity) BEKK (Baba, Engle, Kraft, and Kroner) regression models. The GARCH-BEKK model is based on a framework without any restrictions on the conditional correlations of the multivariate model. Accordingly this model can differentiate directions and magnitudes of volatility spillovers. Additionally, the asymmetric model can differentiate downward shock (resulting from unexpected increase in return) and upward shock (unexpected decrease in return), therefore it is chosen in this study to find out existence of this asymmetry. It is shown that there is a obvious distinction between downward and upward shock from many recent studies.
Total sample period of this paper is 4,173 days from the beginning of 1997 to the end of 2012. However, to discover the volatility spillover effect in times of crisis more precisely, I add another sub-sample period of Global Financial Crisis from July 1, 2008 to June 30, 2009.
Major findings are as follows.
First, shock spillover from Korea to Germany is shown to be significantly positive, contrary to the significantly negative effect of that from Germany to Korea, from the estimation of symmetric model during the whole sample period of 1997 to 2012.
Second, downward shock spillovers stemming from the unexpected decrease in market return in both directions turn out to be negative in the whole sample period, suggesting mutual diversification effect between these two countries.
Third, during the Global Financial Crisis times, results for the shock spillovers from the symmetric model are changed to be just the opposite from the results during the whole sample period. In other words, shock spillover from Germany to Korea turns out to be positive whereas that from Korea to Germany is shown to be negative.
Finally and most importantly, downward shock from Germany to Korea during the GFC times turns out to be significantly negative while that from Korea to Germany shows still positive, signaling diversification effect in portfolio formation from Korea especially in the crisis times.
The last finding is perhaps for the first time and quite surprising and valuable among the studies for international volatility spillovers in the global stock market. The last finding is the existence of significantly negative shock spillover, i.e., shock reduction from the developed market to the emerging market.
Possible Establishment of Trust Funds for Improving the Quality of Aid Delivery to North Korea
Authors:   Asia-Europe Perspective Association, Lee Jong-Woon
Published: June 2018

The Multi-Donor Trust Fund (MDTF) is an inter-agency and pooled funding mechanism designed to receive contributions from more than one donor to support specific development-related activities in recipient countries. Due to the theoretical and practical advantages of the MDTF, trust funds have emerged as a major instrument for channeling development assistance across sectors in developing countries. The establishment of trust funds could be a feasible option for promoting resource mobilization and aid coordination of humanitarian assistance to North Korea. As pooled trust funds implemented in developing countries have governance arrangements involving bilateral donors and multilateral organizations, MDTF could provide a policy forum in which North Korea might engage with its international donors.
This paper explores the potential roles that trust funds could play in resource mobilization and policy dialogue in the North Korean context. In order to draw implications of trust funds for North Korea, it also examines several MDTFs established for developing countries. Taking into consideration the previous implementation of MDTFs, an effective approach on the parts of South Korea and other contributing donors would be to establish a UN MDTF for North Korea following advancements in the country’s foreign relations. The initiation of UN MDTFs could play a leading role in guiding the way out of North Korea’s current economic hardship. Indeed, the setting up of the MDTF would function as an operational vehicle for ensuring the effectiveness and transparency of aid delivery to North Korea during the initial stages of its diplomatic improvement. The establishment of multi-donor trust funds could promote tripartite cooperation between North Korea, South Korea, and international donors aimed at the development and transformation of North Korea. The primary role of North Korea MDTF would thus be to provide a forum for policy dialogue in the coordination of development assistance. It would also pave the way for improving aid administration among international donors. As a policy oriented study, this paper highlights certain considerations related to institutional procedures, governance structure and management challenges of MDTFs for North Korea.
Appeasing the Fear of Abandonment in Asymmetric Alliances: The ROK-US Alliance Case
Authors:   Asia-Europe Perspective Association, Kim Young-Joon
Published: June 2018

Every international alliances go through difficult times for various reasons. The dilemma created by the fear of entrapment and the fear of abandonment is one of the most common problems that international alliances face. In order to maintain stable alliance, the alliance members must deal with each other’s fear. This article analyzes the policies implemented by the Unites States to appease South Korea’s fear of abandonment by the U.S.. Right after the liberation of the country, Lee Suengman and other Korean right wing politicians began to worry about the U.S. government’s willingness to defend Korea from the communist threat. The U.S. government tried to reduce the size of its military in the Korean peninsula and Lee and his followers saw the troop reduction as a sign of U.S.’s abandonment of Korea. Their fear of abandonment was exacerbated when Dean Acheson, then the U.S. Secretary of State, delivered a speech at the National Press Club on January 12, 1950. In his Press Club speech, Secretary Ahceson warned that the United States would defend its possessions and occupied territories. Then he went on to say that “This defensive perimeters runs along the Aleutians to Japan and then goes to the Ryukus. ... The defensive perimeters runs from the Ryukus to the Philippine Islands.” The message that Lee and the right wing Korean politicians received from the speech was clear. The Korean Peninsula is not included in the Untied States’ defense perimeters. South Korean political leaders were afraid that Kim Il-Sung would interpret the speech as the way they did and attempt to make a radical movement. No more than six month later, the fear became real. Since then South Korean leaders’ fear of abandonment was one of the major sources rattled the US-ROK alliance. Therefore, in order to maintain a stable alliance relations with South Korea, the Unites States government had to take measures to relieve South Korean political leaders’ fear of abandonment.
In this research, I identify three policies implemented by the United States government to stabelize the US-ROK alliance. First is the armament of South Korean military. Despite the risk of violating the Korean Armistice Agreement signed on July 1953, the U.S. government decided to strengthen South Korean Army by allowing arms transfer and arms sales to South Korean government. The weapons placed in Korea included nuclear armed Honest John missiles and 280mm atomic cannons. The Korean Armistice Agreement paragraph 13 (d) mandates that neither side introduce new weapons into Korean Peninsula, other than piece-for-piece replacement of equipment. Therefore, the deployment of nuclear weapons in South Korea was clear abrogation but the United States proceeded to protect South Korea.
Shanghai Cooperation Organization: Evaluation and Prospect
Authors:   Asia-Europe Perspective Association, Park Sang-Nam
Published: June 2018

This study is focused on evaluation of the Shanghai Cooperation Organization (hereafter, SCO) - one of the key regional organizations established in the Eurasian continent - from the multilateral perspective. The SCO is often understood as a group containing the US’s unilateralism with the concert of Russia and China plus other member states in Central Asia. From the multilateral view, certain aspects of the SCO appears weak because it shows a low degree of functionality, institutionalization, orientation and consensus among member states. However, despite the mentioned limitations, we can see some achievements and developments made by the SCO in the Central Asia where multilateral experiences are less exposed to so far. The SCO has been especially showing positive consequences on cooperation in non-traditional security sectors such as border security, radical separatism, terrorism and drug and illegal weapon dealing as well as cooperation in economic domain like energy resources development and infrastructure building. From the view of regional powers, the SCO is one of the mechanism that Russia has been taking advantage of in order to reinforce her international status aftermath the financial crisis and the Georgian war. In case of China, the SCO is the main path to extend her economic influence up to the Eurasian continent beyond the Central Asian region. Meanwhile, Central Asian states regards the SCO as an useful instrument to confirm their independence and strengthen diplomatic positions against the neighboring power states.
With taking such achievements and limitations into consideration, the viable factors being able to influence over the future prospects of the SCO are identified with as followings: the change of the US’s policy towards Central Asia and its impact, future development between Russia-China relations, competitions and conflicts among Central Asian states and their directions of development. Nevertheless, the predominant opinions are most likely to point out that SCO would develop as an influential player in the Eurasian international oder for the time being.
The Study on the Korea-China Cooperation for the Activation of Southwestern Coast Offshore Wind Farm: Saemangeum perspective
Authors:   Asia-Europe Perspective Association, Ko Hyun-Jeung , Kang Tae-Won
Published: June 2018

Offshore wind power is increasingly getting attention from a number of countries since it is to not only easily find a vast area for the construction of wind farm but also minimize collective civil appeals of noise and vibration. Many countries such as UK, Denmark, Germany, China, etc thus are expanding their investment on it. Korea also aimed to foster offshore wind industry as the nation’s new growth engine and announced the project of a southwestern coast 2.5GW offshore wind farm. To facilitate the project, Korean government appointed Gunsan port for supporting the construction of the offshore wind farm, which is located in the Saemangeum area. In particular, the port will be expected to play the role of a logistics base for off-loading, storage, assembly and transportation of large-heavy wind turbines and sub-structures. In addition to the offshore wind port, offshore wind turbine related manufactures such as Hyundai Heavy Industrial Ltd. KM Co. Ltd. DACC Co. Ltd. etc have already been moved in the national industrial parks of Saemangeum-Gunsan region so that it has sufficient potential to be a strategic location for offshore wind power cluster. China has a goal to install over 10GW by 2020 according to the national plan of renewable energy development. In fact, China’s NEA(National Energy Administration) in 2009 requested 11 provincial governments along the east coast of China(Shanghai, Jiangsu, Zhejiang, Shandong, etc) to give in the plans of offshore wind development and finally established a national plan for large capacity offshore wind farms.
In this regard, the offshore wind farms to be installed in the east coast of China are close to Saemangeum-Gunsan area so that this paper proposed three cooperation measures with respect to the Saemangeum’s geographical advantages. First, it is to build a cooperations system of Korea-China international specialization on offshore wind power. It is explained that Jeonbuk province where shipbuilding, offshore plant, and machine part manufactures have been already running their businesses has been placed increasing pressure to clarify policy around support, subsidies, and overall framework policies. Second, it is to use Gunsan port with sufficient hinterlands and water depth as a logistical base for Korea-China wind power farms since Korea government selected it as a offshore wind support port. Finally, it is to carry forward various China-Korea professional manpower training and exchange programs. There are a few centers for the development of new and renewable energy human resource in Jeonbuk area.
Therefore, as the accumulation of knowledge and technology is needed in order to economically construct and operate the southwestern coast 2.5GW offshore wind farm, this paper suggested a good way of cooperation with China and Korea for the development of offshore wind power industry and would finally support to help the development and facilitation of Saemangeum project.
Top Talent Management Practice and Firm Efficiency: Evidence from Korean Firms
Authors:   Asia-Europe Perspective Association, Ahn Ji-Young
Published: June 2018

This study examines the effect of the top talent management HR practice on firm efficiency. Using a longitudinal survey conducted by the government sponsored research institution over 358 Korean firms, the results show that war for top talent management practice does not have a significant impact on firm efficiency measured by labor productivity and return on assets(ROA). However, findings partially support that there is a negative relationship between the top talent management practices and firm-level relative efficiency such that a broad use of top talent management practices may increase firm-level inefficiency using the Stochastic Frontier Production Function (SFPF).
A cross-country study on the country-specific factors in international comparison of public social expenditure
Authors:   Asia-Europe Perspective Association, Seo Eunsook
Published: June 2018

This study is aimed at analyzing and evaluating the magnitude of cross-country differences in public social expenditure caused by country-specific factors that cannot be explained by models that only take into account economic and social conditions. Even though such models attempt to control for cross-country differences in an array of factors including not just macroeconomic variables and aging but also pension maturity, tax and social security burden, fiscal soundness, etc., there still remain gaps that are left unexplained by such variables. The purpose of this paper is to see what happens once country-specific factors have been controled for. The problem with international comparisons that fail to control for country-specific factors is that they can underestimate, for example, Korea’s level of public social expenditure vis-a-vis European countries, whose welfare regimes have much deeper historical roots and are shaped by extra-economic factors such as the political proclivities of the continent, the extent of public consensus, etc.
The findings of this study are the following. First, Korea’s public social expenditure is on average 8.3 percent lower than that of Luxemburg before controlling for country-specific factors, and this 8.3 percent difference can be seen as the spending gap explained by country-specific factors. This is a large portion of average public social expenditure, and so controlling for the factors behind such a gap seems a worthwhile exercise when comparing countries. Second, the study computed the ratio of actual value to estimated values of public social expenditure(AER) either with or without controls for country-specific factors, and compared the two results. Without controls, Korea’s AER for total public social expenditure stood at 61.67 percent as of 2011, the corresponding figures for cash-equivalent expenditure and in-kind expenditure being 45.53 percent and 77.14 percent, respectively. After controlling for country-specific factors, however, Korea’s actual aggregate public social expenditure while still below estimated spending, stood at 97.89 percent of the OECD average level. Cash expenditure and in-kind expenditure were respectively at 85.26 percent and 102.53 percent of the OECD averages.
Study on Economic Cooperation Strategy of China’s “Silk Road Economic Belt
Authors:   Asia-Europe Perspective Association, Lee Joo Young
Published: June 2018

‘One Road and One Belt’ is ongoing with two strategies, the ‘Silk Road Economic Belt’ and the ‘21st-Century Maritime Silk Road’ The project aims to build a huge economic belt by connecting wide range of areas not only in Asia, but in Africa and Europe. As ‘One Road and One Belt’ covers large areas, economic cooperation with neighboring countries can be an indicator of success. In this study, I analyzed the impact on Chinese economy and regional economic cooperation focusing on the ‘Silkroad economic belt’ linking Central Asia and Europe. Central Asia is the borderland near Xinjiang Province in China. It has played a major role for new energy supply and as a frontier for opening European market by establishing pipelines and railways in recent years.
Thereby, China is expecting that it will lead to stable economic growth and a new opportunity to economic take-off. However, countries like China, the US, Japan and Russia are implementing a development strategy in Central Asia. Therefore, it seems as various economic cooperation organization are competing each other in the same area. Furthermore, the management structure of AⅡB is left unresolved and the conflicting interests among nations and organizations, the emergence of a new organization such as EEU which can check China’s interest and problems caused by ideology and conflict among nations could be factors that delay or impede economic cooperation of neighbor nations. Especially, the Korean Peninsula(North Korea) is bordered by China and Russia. However, the Korean Peninsula was not included in the Silk Road economic belt. If the Silk Road economic belt is connected to the ‘Eurasia Initiative’, It will be able to promote the economic development in Northeast Asia. Therefore, China should establish a new economic cooperation organization in order to obtain the agreement of neighboring countries and increase the necessity of economic cooperation through the Free Trade Agreement. China should expand the multiple channels of communication for to receive a new offer of its neighboring countries’s. If China wants economical development and regional economical development through a successful Silkroad economic, stable cooperation in Central Asia would be necessary.
The Growth of UFC (Ultimate Fighting Championship) and Challenges in Asian Market
Authors:   Asia-Europe Perspective Association, Hong Jin-Hwan , Woo Won-Seok
Published: June 2018

Sport marketing has rapidly developed with sponsorship marketing, via ‘marketing through sports’, but recently ‘marketing of sports’ also has emerged in importance.
This case illustrates the growth of the Ultimate Fighting Championship (UFC), a newly born Mixed Martial Arts (MMA) organization, and its marketing process. In spite of increasing competition with other sports, UFC has succeeded in gaining popularity and a leading position in MMA. This case deals with the growth history of UFC and the challenges it faced in the global, especially in Asian market.
UFC succeeded by aggressive mergers and acquisitions, celebrity marketing, The Ultimate Fighters (TUF) TV programs, and so on.
Based on these success factors, UFC attempts to globalize aggressively. However, UFC faced several challenges in Asian markets, for example, cultural differences and business model. UFC considers that success of globalization is dependent on Asian market, because of its huge population and market potential.
This study analyzes the case of a new MMA sport of UFC, and finds some implications of sport marketing.
Congruity effects of self-image, functions and values of customers on the satisfaction and loyalty to social enterprise based on the BeautifulStore
Authors:   Asia-Europe Perspective Association, Lee Seung-Hyun , Park Seong-Yeon
Published: June 2018

In spite of fast development and importance of social enterprise, most social enterprises are small-sized, lack professionals and knowledge, have low level of consumer awareness, and depend on government’s material support. Those social enterprises need marketing research that can help them to be sustainable. This study focuses on three factors: (1) congruity between the images of social enterprises and self-images of customers (2) congruity between the expectation of consumers and the perceived performance of social enterprises’ goods (3) congruity between the social values of social enterprises’ goods and the values of customers. This study examines how the three factors affect the satisfaction and loyalty of customers and tests the moderating effect of the involvement of public interest.
The findings are as follows: First, congruity of self-image, functional expectation and values of customers with the images of social enterprises, functional performance and social values of the social enterprise goods all affect the satisfaction and loyalty of customers positively. Second, involvement of public interest significantly plays the role of moderator. Third, most of the social enterprise customers are women and belong to the income category below average. They have high degree of involvement of public interest, which shows the characteristic of the customers of social enterprises.
A Study on the Introduction of GTC System and The Export Drive Policy in Korea
Authors:   Asia-Europe Perspective Association, Shin Jang-Churl
Published: June 2018

In this study, we find that, with the successful process of the three series of “5-year economic development plans,” Korean economy made a fast economic growth following rapid export increase in 60s and the early 70s. In particular, Korean economy of the time was definitely meeting with extensive heavy and chemical industrialization based on the economic growth strategy which is called “Export Drive Policy.” However, in the face of the collapse of the Bretton Woods System in the early 1970s and the international monetary crisis, Nixon Shock, World Oil crisis and so on, global economic order fell into disorder. Especially, some developed countries used the new protectionism in defense of domestic industry and it reduced global export market. This trend became the cause of crisis to export-oriented strategy of Korea which has a high foreign resource dependent, high population density. Facing the situation as above, the Korean government started to actively seek a way to cope with domestic and foreign environment changes of economy in the early 70s and to seek continuous extension of export. This study clearly showed that the correlation of these factors with the introduction of GTC appointment system in April, 1975. Above all, this research analyzed the contents and supporting policy of GTC appointment system along with the influence on the appointed GTC by examining the case of Samsung Corporation. In particular, through the study of the GTC specified system in Korea, it can be seen that a variety of conditions and requirements. That is, for the conventional trading company is specified by the state was to GTC have the following requirements. 1) annual export earnings $ 50 million or more, and 2) more than the number seven exports over 50 million US dollars, 3) export may state more than one million dollars over 10 countries, and 4) the number of foreign subsidiaries more than 10 points, 5) Capital requirements had to be met in the light 10 billion or more. Samsung Corporation noted in this study that were already equipped with the specified requirements of the already. That is, GTC 1975 Samsung Corporation at the time of application are: 1) this was a $ 52 million annual export earnings, and 2) exports were more than $ 500,000 has 9 items. As well as 3) was the number of countries exporting more than $ 1 million in 13 countries, 4) 11 Number of foreign branch, 5) capital of 1 billion won was the scale. Through this process, Samsung Corporation has been designated as Korea’s first GTC.
The Effects of K-IFRS Adoption on the Magnitude of Post Earnings Announcement Drift
Authors:   Asia-Europe Perspective Association, Song Jieun , Woo Yong-Sang
Published: June 2018

This study is on the demonstrative analysis of the effect of the adoption of Korean International Financial Reporting Standards (hereinafter called K-IFRS) on the size of Post Earnings Announcement Drift (hereinafter called PEAD). As a result of the analysis of firms listed on KRX from 2006 to 2013, the adoption of K-IFRS has had a noticeable negative effect on the size of PEAD. This is in uniformity with a positive assessment of the adoption of K-IFRS by the preceding studies, which means that the under-reaction of investors decreased due to the adoption of K-IFRS. The major result of this study is summarized as follows.
First, the analysis of the samples of the whole firms listed on KRX did not show an outstanding effect of the adoption of K-IFRS. This may be because of the possibility that the regression coefficient sign that shows the size of PEAD was shown converse according to the directions of unexpected earning and offset the effect or because of the possibility that PEAD was weak or was not shown in the case of negative(-) unexpected earning as shown in the previous paper. Therefore, as a result of the analysis of the separate samples according to the directions of unexpected earning, PEAD was continually observed only in the sample of the positive(+) unexpected earning, showing that the adoption of K-IFRS has negative(-) effect on the size of PEAD. Second, the ownership percentage of foreign investors does not have an effect on the relation between K-IFRS adoption and the decrease of PEAD. Third, samples were taken separately from firms which have analysts’ earnings forecast information and which have not analysts’earnings forecast information because there may be differences in the size of PEAD due to the adoption of K-IFRS according to the provided information. As a result of the analysis, the size of PEAD decreased due to the adoption of K-IFRS in the sample of firms without analysts’earnings forecast information and with positive(+) unexpected earning. And PEAD was observed longer in the firms without analysts’earnings forecast information and with positive(+) unexpected earning.
This study has a significance in demonstrating the capital market response through PEAD. The previous paper which use earning response coefficient(ERC), Ohlson(1995) model, and etc. showed that the capital market is making a positive assessment on the adoption of K-IFRS. The analysis of the adoption through PEAD came to the same conclusion. The decrease of investors’under-reaction of the adoption of K-IFRS means that investors are showing response as the adoption of K-IFRS intended through accounting transparence and reliability enhancement.
The Effect of Auditor-provided Tax Consulting Fees on Accounting Transparency
Authors:   Asia-Europe Perspective Association, Kim Ho-Joong , Kim Jin-Wook , Kim Jin-Tae
Published: June 2018

This study examines the relationship between non-audit fees and accounting transparency. In particular, we investigates the effect of auditor-provided tax consulting fees on accounting quality, proxied by modified Jones model-based discretionary accruals and performance matched discretionary accruals. The empirical results for the period of 2008-2013 are as follows. First, we find that auditor-provided tax consulting fees are significantly and positively associated with performance matched discretionary accruals, implying that firms with higher auditor-provided tax consulting fees are more likely to engage in earnings management. Second, we find that firms belongs to high tax fee group are positively associated with both modified Jones model-based discretionary accruals and performance matched discretionary accruals while firms belongs to low tax fee group are positively associated with modified Jones model-based discretionary accruals only. Overall, the results suggest that auditor-provided tax consulting impairs auditor independence, resulting in the deterioration of accounting transparency.
The Effect of EITC on the Consumption of Low-Income Households
Authors:   Asia-Europe Perspective Association, Kim Tae Woo , Woo Seokjin , An Jong-Kil , Binh Ki Beom
Published: June 2018

In Korea, EITC system was introduced and executed in 2009. The aim of this paper demonstrates how Earned Income Tax Credit (EITC) affects the consumption of EITC group, classified as working-poor, using Differences-in-Differences-in-Differences (DDD) technique. After pre-specifying EITC and non-EITC group using the research that provides the monthly data in 2008 and 2010 of Household Income and Expenditure Survey by National Statistical Office, we analyze the effect of EITC on the actual expenditures on total consumption, durable goods consumption, non-durable goods consumption, savings and reducing on debts or liability.
It turns out whereas the EITC group booted their consumption on durable goods in the overseas research, the consumption of EITC group has not increased in our study. The domestic EITC group can be regarded as households pursuing consumption smoothing. We can guess that this group would regard a subsidy due to EITC as transitory incomes so it does not increase consumption in accordance with permanent income hypothesis. Considering the increase in savings, the EITC group who gets benefits from the program seems to prefer to save up instead. This result represents that the uncertainty of the future make them consider and choose to save up instead of the current consumption. This is considered this way due to the fact that the EITC group relatively comparing to non-EITC group would not be well-prepared for their future finance issues that might occur in the future in an effort of them to reduce the financial insecurity.
Widened Price-limits and Changes in Market Liquidity
Authors:   Asia-Europe Perspective Association, S Junghooneon
Published: June 2018

Korea Exchange has widen daily price limits from ±15% to ±30% of previous trading day’s closing price on June 15, 2015. This paper utilizes the event as a natural experiment to study whether market frictions has changed due to widening price limits. Market friction is defined as the degree of difficulty of trading in a market. As market friction gets bigger, the more compensation is need to be paid to liquidity providers in the market. That is why market friction can be measured by trading costs that are paid for immediacy to liquidity providers. Further more, market friction has a negative impacts on market liquidity. Since any factor that restricts trading activity and increases trading costs can be considered as market friction, we can regard price-limits as a factor of market friction. The existence of price limits itself restrict price variability and trading activity. The widening price limits expand the band of price variability might affect on market friction and, thus, market liquidity. In order to conduct such investigation, we define trading costs that occurs by price limits as market frictions and decompose them into two components: real frictions and information frictions. The real friction is related to the component of trading costs that consume real resources of liquidity providers (e.g. order processing costs and inventory holding costs). Meanwhile, the informational friction is related to the components of trading costs that redistribute investors’ wealth without consuming real resources of liquidity providers (e.g asymmetric information costs). Using half-hour intraday interval data, we compare KOSPI 200 stocks’ real frictions, information frictions, and total market frictions during such price discovery before and after the event. The changes in market frictions that has occurred after the event can be summarized as follows: First, trading activity measured by volume and turnover has increased. Second, real frictions has decreased, while informational frictions has increased. Finally, total market friction has not changed. Overall, our results provides implications as follows: The increased trading activity due to widening price limits lowers order processing or inventory holding components of spreads, and thus decreases real frictions. As informed trades are less restricted than before by widening price limits, informed traders tend to trade more actively, and thus the degree of information asymmetry and information frictions are likely to be increased. As the decreased real frictions and increased informational frictions has been offset exactly, the total market friction and, thus, market liquidity has not changed at all.
Empirical Test of Multi-Factor Models in the Taiwan Stock Market
Authors:   Asia-Europe Perspective Association, Choi Moon Sub , Huang Seth H. , Jeon Yeri
Published: June 2018

Large number of studies have been performed to model asset returns in terms of risk factors. After the emergence of modern portfolio theory, asset pricing models have been evolved from single factor to multi-factors. Along with development of the models, validation of models with various portfolios and regions continued in wide range. However, researches in emerging Asia-Basin markets still need considerable amount of regional modeling and verification. Also, limited number of studies were conducted on industry sorted portfolio returns and more recent multi-factor models in particular. Therefore, this study focuses on validation of several market models in Taiwan stock market.
This paper applies empirical tests with several well-known multi-factor models on portfolios sorted by industries in Taiwan stock market. Sample data includes all listed stocks collected from Taiwanese Stock Exchange (TWSE) from July 2001 to December 2015. Following Moerman (2005), industry portfolio is constructed based upon TWSE’s industry group classification codes per FTSE codes. To compare effect of each model in different portfolios, capital asset pricing model (CAPM), Fama and French’s (1993) 3 factor model, and Carhart’s (1997) 4 factor model are used in the study.
In previous studies of the Taiwan stock market, it is known that market premium (MP) factor shows significant influence on return and relatively weak support to the effects of “high-minus-low” value premium (HML) and “small-minus-big” size premium (SMB) factors (Ko, 2014; Cheng, 2006). However, effect of the momentum factor (“up-minus-down.,” UMD) needs more validation. Also, as Fama and French (1997) discussed in U.S. market, returns of portfolios constructed in respect to industry sector is not very accurate when compared to other portfolio returns. Comparable results were observed in the European markets (Moerman, 2005). Industry sorted returns in emerging Asia-Basin markets were mostly done in limited extent and need further research.
Empirical results from various time period samples have shown some differences between industries exist when different factor model is tested in Taiwan market. When whole period sample is used, influence of MP factor prevails over other factors. SMB, HML and UMD factor show significance in certain industries. In 5-year basis period sample, 2001-2005 and 2006-2010 periods show results similar to whole period, but period from 2011 to 2015 deviates from formal results with significant UMD factor in number of industries. However, similar to result of Fama and French (1997), there is no evidence of clear winner on different models in all time periods in terms of model fitness. Overall, consistent with findings of Cheng (2006), MP factor has significant influence in explaining industry return. Effects of other factors are limited with weak influence.
Effects of Corporate Governances on M&A Announcement Returns in KOSDAQ
Authors:   Asia-Europe Perspective Association, Lee Kaun Y.
Published: June 2018

Using the samples of 219 acquiring companies in KOSDAQ, the paper analyze the effects of governance on the performance of acquiring companies around the announcement. Unlike previous studies, this study includes acquisitions of business and acquisitions of stocks in the analysis. To measure the governance, I use the governance scores reported by the Korean Corporate Governance Services(KCGS) and scores of sub-category. To examine whether the effects of CG2(board) and CG4(audit) results from regulatory aspects, I divide the sample into two, small cap group and large cap group. Large cap group whose assets size is greater than 100 billion Korean Won should be obliged to have outside directors and auditors.
Due to the small variation in overall governance scores among the small cap companies, I could not find a statistically significant results from the regression analysis for small cap group. However, after breakdown the governance scores into 5 categories, CG1(Shareholder right) has a significantly negative effects on CAR and CG4(audit) has a significantly positive effects on CAR. One of possible explanation is no separation of management from the ownership. Managements as owners will not pay much for the target firms and may save the cost for adopt the anti-takeover provisions (ATP). Because small cap company has small board of directors, it has not many outside directors. As a result, its CG2(board) are not much different from other small cap companies and CG2(Board) may have no significant effects on CAR.
Regression results for large cap group indicate that CG(overall) has a significant and negative effects on CAR. This results comes from the dominant negative effects of CG1(Shareholder right). Because regulation forces the large cap companies to have outside directors and auditors, no large cap company seems to improve CG2(board) and CG4(audit) voluntarily further than its requirement.
A Study on the Relationship of Leader’s HEXACO Personality traits on Organizational Effectiveness
Authors:   Asia-Europe Perspective Association, Kim Suk-Won , Lee Dong-Myung
Published: June 2018

This study tried to identify the effects of the personality traits of leader in the organization on leadership, LMX and organizational effectiveness. Honesty, emotionality, extraversion, agreeableness, conscientiousness and openness to experience (6 factors of HEXACO traits) were used as factors of traits. It was tried to provide working level suggestions related to recruitment and training of leader and their career development and the orientation of leadership that are newly required according to the trend of times and the roles of leader in the organization.
Results of the study show that traits of leader made significant effects on leadership, LMX and organizational effectiveness. The followings are summary of the study results and suggestions.
First, it was identified that traits of leader made effects on leadership, LMX and organizational effectiveness. HEXACO 6 factors of traits of leader made partially significant effects on transformational leadership. On affect of LMX, extraversion, agreeableness and openness to experience made effects, while on loyalty, honesty, extraversion and agreeableness made effects. On desire of contribution, agreeableness, conscientiousness and openness to experience made effects, while on professional respect, honesty, agreeableness, conscientiousness and openness to experience made significant effects. In the relationship between traits of leader and organizational effectiveness, traits did not make effects on job satisfaction. On organizational commitment, conscientiousness and openness to experience made effects, while on turnover intention agreeableness, conscientiousness and openness to experience made effects. Out of traits factors, emotionality was found not to make significant effects in all relationships.
Second, transformational leadership made effects on LMX and organizational effectiveness, while LMX also made effects on organizational effectiveness. Transformational leadership made effects on all three sub-factors of LMX excluding loyalty. Significant effects of LMX on organizational effectiveness can be interpreted that relationship between leader and subordinates made significant effects on organizational performance. It can be said that transformational leadership playes important roles in organizational performance.
Third, study results provide good suggestions for recruitment, education and career development of leaders. If traits factors are utilized for organizational management applying them to evaluation, recruitment, placement and guidance programs, it is thought to contribute to enhancement of organizational performance. If we study behavioral typology of leasers and utilize the result for leader training, we can improve quality of relationship between leader and employees and enhance organizational commitment of employees reducing turnover intention at the same time.
The Effect of Seller’s Transaction Orientation on Satisfaction, Commitment and Future Transaction Intention
Authors:   Asia-Europe Perspective Association, Kim Yoon Gang
Published: June 2018

Door-to-door sales have recently regained its popularity since after a period of declination. This trend is especially prominent in cosmetic market where the seller use door-to-door sales sell high quality goods through which they harvest a lot of profit. The reason that this door-to-door sales is prosperous is that sellers are not only improving the value of brand by providing the high quality products with high-end service to limited customers but also increasing the number of royal customers by keeping the constant personal relationship with them. Long-term relationship is one of the most important factors in relationship marketing researches; this insists upon the advantage of long-term transactions over short-term transaction in terms of reducing cost in transactions, reducing uncertainties, increasing competitive power. However, most studies were only focus on the view point of customers. Here, this research is mainly focus on the effect of sellers’ transactional and relational orientation on satisfaction, commitment, and their future intention.
Seller’s orientation is classified into two categories; transactional orientation to pursue short-term profit and relational orientation to pursue long-term relationships with customers. The classification is required to test the impact of seller’s orientation on economic and social satisfaction and the impact of seller’s satisfaction on commitment and customers’ future transactions.
The results indicate that the seller’s transactional orientation does not affect economic or social satisfaction, but the relational orientation affects both. In other words, if a seller is looking for long-term deals and focuses on customer relationships, both economic and social needs can be satisfied. In addition, the economic and social satisfaction of seller influences his commitment to affect customers’ future intention.
Enhancement of Heat Seal Properties of Polypropylene Films by Elastomer Incorporation
Authors: Boutrouka R. , Tabatabaei S. H. , Ajji A.
Published: June 2018

Seal strength at high and low temperatures as well as the width of the heat sealing temperature range are important properties in packaging industry. In addition, for sterilisable and retort applications, having those properties at elevated temperatures is crucial. Polypropylenes (PP) are usually used for these applications, however, the sealing temperatures are too high and the temperature range for the seal process is narrow, thus blending with a PP elastomer copolymer can be an alternative. In this study, hot-tack and heat seal properties were determined for a homo-polypropylene, a random co-polypropylene and an elastomer co-polypropylene based films and their blends. It is found that the seal initiation temperature (for hot tack and heat seal) is governed by the melting temperature and crystallinity and the increase of the elastomer content in the blends leads to a decrease of the seal initiation temperature. It is also shown that the sealing force depends on the ease of chains diffusion across the sealing interface. Finally, it was found that the strength of the heat sealing increases by recrystallization in the sealing interface after cooling.
PLA Crystallization Kinetics and Morphology Development
Authors: Refaa Z. , Boutaous M. , Siginer D. A.
Published: June 2018

This paper investigates the crystallization kinetics and morphology development of PLA. The transitory stages in the evolving flow-induced crystallization of PLA are identified and classified in terms of the overall crystallization kinetics and the crystalline morphologies. Under quiescent conditions, temperature governs the crystallization process and the slow crystallization kinetics of PLA is highlighted under these conditions, whereas under shearing conditions, the crystallization is highly enhanced due to the promotion of the nucleation mechanism. The enhancement of the crystallization implies also morphological modifications. Depending on the shear rate and the shearing time the microstructure changes dramatically: spherulitic microstructure, fine grained microstructure and oriented microstructure. For a specific shear rate, depending on the magnitude of the shearing time the microstructure assumes the following states: for low shearing time only an increase of the number of nuclei is observed (leading to fine grained microstructure), followed by a saturation of point-like nuclei, and for a relatively long shearing time (i. e. beyond a critical shearing time) the development of oriented structures looking like “shish-kebabs” is observed. The critical shearing time for the formation of oriented structures in PLA is determined as a function of the shear rate.
A Criterion for the Formation of Fibrillar Layers in Injection Molded Parts
Authors: Pantani R. , Speranza V. , Titomanlio G.
Published: June 2018

It is quite well known that the morphology of an injection molded part made by a semicrystalline polymer presents several layers. In particular spherulitic structures are found in the core region, a layer characterized by highly oriented fibrillar morphology (the shear layer) usually follows and a skin layer is often observed at the sample surface. The thickness of the fibrillar layer deeply influences the mechanical properties of the part. In this work, a criterion to predict the thickness of the fibrillar layer is proposed and verified. The criterion is essentially based on the amount of viscous work done when the molecular stretch is higher than a critical value: the molecular stretch should be above a critical value while a critical amount of viscous work is accumulated. In order to tune the parameters, and to validate the criterion, a well characterized polypropylene was chosen as test material, and four different injection molding conditions were analyzed. The criterion is verified by comparing some experimental results with the prediction of the UNISA code (an injection molding software developed at the University of Salerno), good comparison between software predictions and experimental data confirms the suitability of the criterion.