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Online Leisure Activity and Digital Platforms in an Open Economy
Digital platforms have become central to modern economies, as consumers increasingly spend leisure time online and platform firms transform user engagement into economic value. This study develops a multi-country, multi-industry o..
Jiheum Yeon and Xiaohan Zhang Date 2025.11.14
ICT economy, DigitalizationDownloadContentExecutive Summary
1. Introduction
2. Data
3. The Model
4. Qualitative properties
5. Numerical Simulation
6. Conclusion
Appendix
ReferencesSummaryDigital platforms have become central to modern economies, as consumers increasingly spend leisure time online and platform firms transform user engagement into economic value. This study develops a multi-country, multi-industry open economy general equilibrium model to analyze how web traffic—measured as visits to platform domains—can be converted into “data capital” through big data and AI algorithms and then used as a non-rival input for production and innovation.
To ground the analysis, we construct a new dataset that links domain-level web traffic to corporate ownership across countries. The evidence reveals sharp cross country differences in the geographic origin of users. U.S. platforms attract a strongly international audience, with domestic users accounting for less than one-third of visits on average. Chinese platforms are more domestically concentrated, though TikTok stands out as a global exception with a highly international user base. Korean platforms, by contrast, rely overwhelmingly on domestic users, with less than ten percent of traffic originating abroad. Comparing these patterns with international service trade statistics, we find that countries with higher shares of foreign users are systematically more active in exporting online services.
Qualitative analysis provides further insight into user behavior. Consumers allocate more time to a platform when they experience greater content satisfaction, which depends on both technological quality and country-specific content preferences. When the quality of foreign platform content improves, consumers reallocate time away from domestic platforms toward foreign ones. The extent of this shift is influenced by the elasticity of leisure demand, the substitutability across platforms, and the share of time already devoted to foreign platforms.
The general equilibrium model allows us to simulate counterfactual scenarios and evaluate policy-relevant outcomes. Reducing cross-border frictions to foreign content raises welfare in all countries, primarily through the expansion of content variety and the reallocation of consumer time, while leaving the broader industrial structure largely unchanged. Lowering barriers faced by foreign platforms, such as discriminatory digital services taxes, increases platform revenues, encourages consumers to spend more leisure time online, and strengthens investment incentives for domestic platforms. Although the immediate welfare gains are modest, the longer-run effects on intangible investment and innovation are more significant. Enhancing the productivity of platform R&D generates asymmetric effects by expanding platform activity in the innovating country and reducing it in the non innovating country, yet global welfare increases because users everywhere benefit from improved content quality and diversity.
Taken together, the findings highlight that the accumulation of web-traffic-based data capital is a central driver of platform growth. Policies that improve access to foreign content, the taxation of digital services, and foster innovation in platform R&D directly influence how consumer time is allocated and how platform firms invest in data-driven growth. For policymakers, the results suggest that lowering barriers to cross-border online activity can deliver substantial welfare gains, that digital taxation should be carefully designed to balance fiscal and innovation objectives, and that investment in platform R&D is essential for competitiveness in the global digital economy.
In sum, this study demonstrates that digital platforms thrive not only on technological progress but also on the ability to accumulate and deploy data capital derived from web traffic. Recognizing the economic role of data capital is crucial for designing effective policies in the digital era, where market access, taxation, and innovation shape the international competitiveness of platform industries. -
Trade and Growth with Digital Data
This paper introduces a newly developed model that examines the interplay between trade, growth, and digital data, emphasizing data’s dual role as both a driver of growth and a source of privacy concerns. Departing from existing ..
Kyu Yub Lee Date 2025.11.07
International trade, 디지털무역DownloadContentExecutive Summary 1. Introduction 2. The model 3. Quantitative analysis 4. Conclusion Appendix ReferencesSummaryThis paper introduces a newly developed model that examines the interplay between trade, growth, and digital data, emphasizing data’s dual role as both a driver of growth and a source of privacy concerns. Departing from existing trade and growth models that have largely overlooked digital data’s unique characteristics, this paper provides the first comprehensive analysis of how data influences growth through data flows and knowledge diffusion, while simultaneously introducing associated privacy trade-offs.
A key novelty of this model lies in its clear distinction between digital data and traditional “ideas.” Both concepts share the characteristics of non-rivalry and stocklike accumulation, meaning they are cumulative and can be used by multiple entities with negligible additional cost. However, ideas are generally understood to produce only positive externalities, whereas digital data uniquely generates both positive and negative externalities simultaneously, including privacy and cybersecurity concerns for consumers.
The model is built within a dynamic general equilibrium framework that incorporates international trade and endogenous technological change, extending the work of Rivera-Batiz and Romer (1991) by integrating the evolution of digital data. Consumption activities, both domestic and a portion of foreign consumption, actively contribute to a country’s evolving data stock. This generated data then acts as a negative externality in the utility function of privacy-conscious consumers, reducing their welfare, even as it serves as a primary input for the R&D sector, fueling the growth engine.
Key findings from this new model highlight significant impacts: First, (economic growth) the model shows that unrestricted cross-border data flows are a significant stimulant for economic growth. This positive effect is further magnified by stronger knowledge spillovers and an increased number of trading partners. Conversely, stricter restrictions on data flows directly impede economic growth. The paper notes that trade liberalization alone, without the diffusion of ideas or data flows, only generates a level effect and does not affect long-term economic growth.
Second, (trade-off with individual welfare) another central finding is the inherent trade-off between economic growth and individual welfare. While open data flows promote economic expansion, they simultaneously intensify privacy concerns, leading to a reduction in individual welfare. This conflict is particularly pronounced in scenarios with limited or inefficient knowledge diffusion. Conversely, the model indicates that stricter data regulations, while hindering growth, can enhance individual welfare by mitigating these privacy risks. To navigate the identified trade-off between growth and privacy, the paper advocates against data localization and strongly supports the implementation of deep digital trade agreements. These agreements are proposed as crucial mechanisms to facilitate freer data flows and knowledge sharing, thereby mitigating the inherent conflict and unlocking the full potential of the digital economy. -
Birth Control and Growth: The Role of Culture
This paper examines how culture influences the success of fertility-control policies. In the 1970s, many developing countries implemented birth-control measures grounded in the quality-quantity trade-off, yet their outcomes diverg..
Minhyeon Jeong et al. Date 2025.08.24
Economic growth, Industrial structureDownloadContentExecutive Summary
1. Introduction
2. The Model
3. Theoretical Results
4. Empirical Analysis
5. Conclusion
ReferencesSummaryThis paper examines how culture influences the success of fertility-control policies. In the 1970s, many developing countries implemented birth-control measures grounded in the quality-quantity trade-off, yet their outcomes diverged, e.g., Taiwan, Thailand, and South Korea achieved rapid fertility declines, while Pakistan, India, and Brazil did not. We propose that societal conformity—the degree to which individuals adhere to norms such as a government-endorsed ideal family size— determines how effectively policy incentives translate into behavior. Using a unified theoretical framework, we show that higher conformity amplifies the impact of birth-control policies on both reducing fertility and increasing investment in children’s education. Under empirically plausible conditions, this strengthened quality-quantity trade-off not only boosts short-run economic growth but also accelerates the shift from agriculture to manufacturing—measured by manufacturing’s employment share—even when manufacturing is more capital-intensive and benefits from human-capital-driven, labor-saving technologies. Finally, we validate these predictions with cross-country empirical evidence, underscoring the pivotal role of culture in shaping demographic change and economic development. -
The impact of EU enlargement and Brexit on international migration
In recent decades, European Union (EU) enlargement has substantially altered the continent’s economic and political landscape by lowering barriers to trade, labor mobility, and capital flows. Migration emerges as a central factor..
Yoonjung Kim and Young Jun Lee Date 2025.06.27
International immigration, MigrationDownloadContentExecutive Summary
1. Introduction
2. Descriptive Facts
3. Gravity Models of International Migration
4. Empirical Analysis
5. Robustness Checks
6. Conclusion ReferencesSummaryIn recent decades, European Union (EU) enlargement has substantially altered the continent’s economic and political landscape by lowering barriers to trade, labor mobility, and capital flows. Migration emerges as a central factor in this transformation, especially following the accession of Central and Eastern European countries. This enlargement has intensified interest among policymakers and researchers in the factors driving intra-European migration and its economic and social implications.
This study specifically investigates the interplay between EU enlargement, the Freedom of Movement (FOM) agreements, and Brexit on labor mobility. Although EU enlargement has generally been associated with deeper economic and political integration, its most profound impact may lie in facilitating international migration. By distinguishing between the timing and impact of EU membership and the Freedom of Movement (FOM) agreements—often introduced at different times— the analysis provides a nuanced view of their respective roles.
Employing a gravity model framework with Poisson Pseudo-Maximum Likelihood (PPML) estimation and a heterogeneity-robust difference-in-differences (DiD) approach, this study examines bilateral migration flows across 224 origin-destination country pairs. The results reveal that EU membership significantly increases migration flows, particularly from newer to older member states, indicating a pronounced east-to-west asymmetry. This effect remains robust after accounting for FOM implementation, and further robustness checks confirm the consistency of the findings under different policy timelines and the inclusion of external mobility agreements.
Additionally, the study explores the impact of Brexit on return migration, uncovering a substantial rise in flows from the UK to EU member countries—especially those that joined after 2000—following the 2016 referendum. These patterns highlight the heterogeneous and asymmetric effects of different EU migration policies and suggest that Brexit exerts a stronger influence on return migration than FOM.
Consequently, the findings highlight the importance of policy-specific analysis in capturing the complexities of migration responses to institutional changes within the EU. -
The Recent Rise of the Far Right and Voters’ Anti-Refugee Attitudes in Europe
This paper explores the connection between individuals’ barrier preference toward immigration and refugee policy and how they are linked to voting behavior. We use three different datasets to tackle these two questions. We utiliz..
Yoonjung Kim et al. Date 2024.11.20
Trade policy, Political economyDownloadContentExecutive Summary
1. Introduction
2. Background
3. Data
3-1. European Social Survey
3-2. Dutch Parliamentary Election Panel Study
3-3. French Electoral Study
4. Econometric Specifications
4-1. European Social Survey
4-2. DPES and French Electoral Study
5. Estimation Results
5-1. Estimation Results Using ESS Data
5-2. Estimation Results Using DPES
5-3. Estimation Results Using French Electoral Study
5-4. Variable Selection Using LASSO
6. Conclusion
ReferencesSummaryThis paper explores the connection between individuals’ barrier preference toward immigration and refugee policy and how they are linked to voting behavior. We use three different datasets to tackle these two questions. We utilize multi-country survey data with abundant information regarding voters’ subjective attitudes toward immigrants to study the determinants of far-right voting in Europe. Notably, even after controlling for education, income level, or current employment status, which represents the human capital endow-ment of natives, industry-level comparative advantage and disadvantage, and political scale from left to right, we still find that a preference for immigration barriers has strong explanatory power for far-right voting behavior. We find that educational attainment and income level are important in explaining vot-ers’ anti-immigration attitudes, as the Heckscher-Ohlin model predicts. On average, voters with higher education and higher income are relatively more open to immigration and aware of their role in the economy.
In addition to the cross-country election studies that allow us to study the anti-immigration attitude, we also use election surveys conducted in the Neth-erlands and France to add more details on the role of individual immigration and refugee policy preference in the voting behavior. The election survey on the parliamentary election of the Netherlands provides a special identification approach that is not available in cross-country election surveys. The panel structure of the Dutch survey allows us to observe the voting history of re-spondents in 2012, 2017, 2019, and 2021 parliamentary elections. Using this information, this paper clarifies the characteristics of voters who newly join supporting right-wing populism. In other words, we study determinants of ‘switching’ voting behavior from non-populist parties to right-wing populist parties focusing on the refugee barrier preference. We explore whether atti-tudes towards refugees affect this switching behavior in the politics of the Netherlands. The election survey on French voters covers the most recent presidential election in France. We elaborate on how immigration policy pref-erences of French voters are related with the popularity of right-wing popu-list presidential candidates in France.
Considering that non-economic factors contribute to explaining the far-right voting behavior, utilizing other non-economic variables such as individ-uals’ sentiments towards various entities (including the government, legal sys-tem, and the European Parliament), and subjective evaluation of their own health and happiness can also add explanatory power, as numerous previous findings imply. For systematic consideration of these abundant variables in the ESS data, we use LASSO for variable selection. For this exercise, we con-sider two approaches in selecting the optimal penalty term, namely cross-validation (CV) and Bayesian information criterion (BIC). It is worth high-lighting that almost all of the immigration barrier preference variables are se-lected when using both CV and BIC for variable selection criteria. -
The Relationship between COVID-19 Entry Restrictions and Immigration
In this paper, we investigate the relationship between COVID-19 entry restrictions and dependence on immigrants. In response to the global COVID-19 pandemic, countries worldwide implemented international travel restri..
Youngook Jang and Donghee Joe Date 2023.12.29
International immigration, Public healthDownloadContentExecutive Summary1. Introduction2. Theoretical Framework3. Data and Methods4. Results5. Policy Implications6. ConclusionReferencesSummaryIn this paper, we investigate the relationship between COVID-19 entry restrictions and dependence on immigrants. In response to the global COVID-19 pandemic, countries worldwide implemented international travel restrictions to reduce the entry of infected individuals. These measures included entry and exit bans, mandatory quarantine of travelers, and vaccination requirements, significantly altering global mobility patterns. Despite their proven effectiveness, entry restrictions also impose substantial economic costs, particularly evident in the form of reduced immigration and subsequent labor shortages in sectors reliant on immigrant labor. We introduce a theoretical framework to shed light on the factors influencing the determination of entry restrictions, encompassing both health and economic considerations. Empirical analyses reveal that countries heavily dependent on foreign labor are inclined to adopt less stringent border controls, balancing the economic costs associated with reduced immigrant workforce. Moreover, we argue that the strength of entry restrictions is determined by a government’s capacity to manage infection waves through means other than entry bans. Finally, we offer policy implications based on our research, on how to control the spread of infectious diseases while minimizing the costs imposed by reducing immigration and the cost imposed on the immigrants themselves. -
Individualism and Political Stability
This study analyzes the relationship between individualism as a cultural trait and political instability as a political characteristic. The intuition of the analysis is that cultural traits can determine political preferences of m..
Minhyeon Jeong and Wongi Kim Date 2023.12.29
Competition policy, Political economyDownloadContentExecutive Summary1. Introduction2. Empirical Findings on Individualism3. Theoretical Framework4. Empirical Analysis5. ConclusionReferencesSummaryThis study analyzes the relationship between individualism as a cultural trait and political instability as a political characteristic. The intuition of the analysis is that cultural traits can determine political preferences of members of society. The study considers a specific political belief: “How much should the government protect individual property rights?” which extends to broader political beliefs such as profree market vs. pro-redistribution. According to numerous studies, individualistic cultures tend to support stronger protection of property rights than collectivist cultures. If the degree of protection of property rights is determined by the political choices of the members of society, it can be inferred that the political preferences that lead to strong protection of property rights reflect the individualistic cultures inherent in society members. That is, the political preferences of society members regarding the degree of property rights protection―or, in a broader sense, pro-free market versus pro-redistribution―are influenced by their cultural traits of individualism or collectivism.This study presents a politico-economic model that captures this intuition. The theoretical results are as follows. First, in societies where neither individualism nor collectivism dominates, political preferences for free-market or redistribution contrast more sharply than in societies where individualism or collectivism dominates. Second, this contrast in political preferences leads to political instability, such that societies where neither individualism nor collectivism dominates tend to be more politically unstable. This study provides empirical evidence supporting the theoretical results.This study identifies a relationship between cultural traits, political preferences and political instability, shedding light on the impact of culture on economic growth. In a nutshell, societies with highly heterogeneous cultural traits among their members are prone to polarization of political preferences, leading to political instability, which constrains economic growth in the long run. -
Resilience of Faith: Post-Covid Religious Trends and the Effect of Ecclesiastical Policy in the United States
This paper delves into the impact of the Covid-19 pandemic and related policies on religious attendance, with a particular focus on Catholic church attendance in the United States. The study utilizes smartphone location data from ..
Angela Cools et al. Date 2023.12.29
Economic outlook, Public healthDownloadContentExecutive Summary1. Introduction2. Background: The US Catholic Church and Dispensations3. Data4. Foot Traffic Trends5. Religious Policies and Church Attendance6. Robustness and Placebo Tests7. ConclusionReferencesTables and FiguresAppendix Tables and FiguresAppendix B: Classifying Religious OrganizationsSummaryThis paper delves into the impact of the Covid-19 pandemic and related policies on religious attendance, with a particular focus on Catholic church attendance in the United States. The study utilizes smartphone location data from SafeGraph Inc. to track weekly religious attendance trends from 2019 through the end of 2022. This approach offers a comprehensive analysis of how attendance patterns evolved during the pandemic. Notably, the study leverages two distinctive features of the Catholic Church: its division into 175 U.S. territorial dioceses, each overseen by a bishop, and the requirement for members to attend Sunday Mass.The study reveals several significant findings. Firstly, it highlights the dramatic decline in religious service attendance following the outbreak of Covid-19. In comparison to 2019 attendance levels, Catholic church visits lagged behind restaurants and other religious institutions throughout 2020 and 2021. However, by 2022, both Catholic and non-Catholic religious attendance had rebounded, returning to approximately 90% of their 2019 levels by October 2022.Secondly, the paper explores the impact of religious policies, focusing on the lifting of dispensations that temporarily exempted Catholics from the requirement to attend Sunday Mass during the pandemic. The study uncovers that dispensation lifting resulted in a 4 percentage point increase in weekend church attendance compared to the 2019 baseline. Notably, this boost was short-lived, lasting for only six weeks following the lifting of dispensations. It's worth mentioning that the effect of lifting dispensations was smaller in magnitude compared to the impact of church reopenings, which were associated with a 6 to 10 percentage point increase in attendance.Thirdly, the study emphasizes the lack of a significant correlation between the lifting of dispensations and changes in visits to non-Catholic religious institutions or restaurants. This suggests that the impact of dispensation lifting on church attendance was independent of other reopening events.In the broader context, this paper contributes to the understanding of religious practice in the face of adverse events, such as natural disasters or economic crises. It distinguishes itself by using actual behavioral data, offering high-frequency insights into the dynamics of religious practice, and benefiting from a large sample size. Additionally, the study sheds light on the impact of religious policies on individual behavior, particularly through the novel exogenous variation introduced by the lifting of dispensations in U.S. Catholic dioceses.Furthermore, this research aligns with the broader body of literature on the effects of social distancing measures on mobility patterns. It contributes valuable insights into mobility within religious institutions, contrasting it with mobility trends in restaurants and bars. -
Industrial Policy, Rise of Skilled Labor, and Firm Growth in the Early Stage of Economic Development
This paper examines the role of education policy in raising specific human capital for industrialization during the period of economic miracle in Korea. As part of the Heavy and Chemical Industry (HCI) drive, the Korean gov-ernmen..
Sunghun Cho et al. Date 2023.12.15
Economic growth, Industrial policyDownloadContentSummaryThis paper examines the role of education policy in raising specific human capital for industrialization during the period of economic miracle in Korea. As part of the Heavy and Chemical Industry (HCI) drive, the Korean gov-ernment built technical schools near industrial complexes, resulting in a prompt supply of skilled labor. With practical curricula and training, young and skilled workers were able to enter the new sector. We also document these two patterns by using the Technical School List and the Occupational Wage survey. This government-led education reform led to higher firm-level productivity and growth, which is one of the important aspects explaining the success of the industrial policy.Motivated by historical evidence, we combine the administrative Mining and Manufacturing survey with the Technical School List to study the effec-tiveness of industry-oriented education reform. We incorporate an education layer into the targeted industries under the HCI drive by exploiting the varia-tion in technical school openings at the county level.Our results show that plants in treated regions tend to employ and invest more than those in control regions, but value-added and labor productivity are negatively correlated with our interaction terms. This implies that firms in HCI sectors experienced disproportionate growth and should pay higher on-the-job costs for workers while education reform may reduce the overall cost of hiring industry-specific labor. In contrast, non-HCI sector firms ex-hibit a positive correlation with value added and labor productivity. These firms might benefit from the education reform that improved overall quality of skilled workers. Lastly, the effect of education reform was concentrated before the end of the HCI drive period and did not persist after 1980.In the era of emerging industrial policy, our paper presents a new mecha-nism that encourages more workers to enter a new sector targeted by gov-ernment-led plans. Our results serve as a starting point for re-evaluating con-temporary industrial policy and underscore the need to consider this addi-tional layer in future policy design. -
An Analysis on the Regional Integration of Northeast Asia by Developing NARCI (Northeast Asia Regional Cooperation Index)
This paper aims to develop an index to analyze regional cooperation in Northeast Asia, which is Northeast Asia Regional Cooperation Index(NARCI). NARCI evaluates intra-regional cooperation and integration in four areas, which are ..
Jiyoung Moon et al. Date 2023.10.27
Economic growth, Industrial policyDownloadContentExecutive SummaryContributors1. Introduction2. Developing the Framework of Index and Criteria3. Calculation of Index3.1. Functional Cooperation3.2. Political-Security Cooperation3.3. Socio-cultural Cooperation3.4. InstitutionalizationReferencesAppendix: Scoring Scheme for NARCISummaryThis paper aims to develop an index to analyze regional cooperation in Northeast Asia, which is Northeast Asia Regional Cooperation Index(NARCI). NARCI evaluates intra-regional cooperation and integration in four areas, which are functional cooperation, politico-security cooperation, socio-cultural cooperation, and institutionalization, in order to identify the conflict and cooperation situation in the Northeast Asian region. The analysis of economic integration found that Northeast Asian regional cooperation is characterized by a high level of integration in goods trade and regional value chain cooperation, but a relatively low level of integration in intra-regional direct investment and energy supply chain cooperation. The analysis of the political and security cooperation shows that the intensification of U.S.-China competition and the factional confrontation between Korea, U.S., Japan, and North Korea, China, Russia have had a significant impact on regional cooperation in political and diplomatic security. The result shows that the level of integration is low, with all evaluation indicators being negative. The analysis of the socio-cultural integration shows a relatively low level of integration in civil society cooperation and intergovernmental exchanges, a relatively high level of integration in cultural and educational exchanges and study abroad, and a neutral level of integration in information technology cooperation, labor mobility, and the share of tourists in the region. Finally, the analysis of institutional integration shows a relatively high level of integration in the bilateral channels between governments and the institutionalization of regional cooperation in the socio-cultural field, and half of the countries had institutional integration in financial integration and regional cooperation in the economic field. The level of integration in the political and security field was low due to the existence of only multilateral meetings. The analysis of NARCI shows that the impact of geopolitical conflicts on the economy and socio-culture has been expanding in recent years. However, the low level of political and diplomatic cooperation in the region and related institutional deficiencies are considered to be insufficient to buffer these risks, and efforts are needed to address them.