Major Research Topics
Changes in Global Economic Security Environment and Korea’s Response
- Economic security policies established by the U.S., China, Japan, Germany and other major economies are analyzed to understand the global environment in the area of economic security.
- Current policies implemented by China, Japan and Germany are important for Korea as they share a similar level of GVC participation, while U.S. policies are essential for Korea’s international cooperation in economic security.
- Economic security policies are analyzed from the perspective of stable supply chains, tech security, etc.
- Korea’s economic security policies and current state of international cooperation are examined to produce a policy direction in line with global trends.
- Plausible scenarios are produced that take into consideration the global economic security environment, also utilizing quantitative analyses of the spillovers from each scenario based on GVC and trade data. Further case studies are conducted to add a qualitative perspective and enable comprehensive analysis of the issues.
Study on Japan’s Management of Global Supply Chain Risk and Cooperation with Korea
- Review of current state of Japan’s strategies to promote economic security.
- Analysis of Japan’s crisis of supply chain disruption (supply chain risk)
- Case analysis of supply chain management by Japanese government and firms
- Analysis of current international cooperation measures by the Japanese government to stabilize the global supply chain, focusing on the Quad and Indo-Pacific Economic Framework (IPEF)
Forecast on Main Changes in EU Supply Chain and International Relations following Ukraine Crisis and Implications for Korea
- When considering the EU’s high dependence on Russian energy, the Ukraine crisis is having a direct impact on the EU economy and forcing it to modify its energy supply strategies.
- The large-scale influx of Ukrainian refugees is expected to change the EU labor market and its relations with neighboring countries.
- The war in Ukraine has led to Sweden and Finland seeking membership in NATO, and the sharp increase in demands to further consolidate regional security channels will likely have a transforming effect on security circles.
- This study aims to examine the developments leading up to these major changes, current situations and future forecasts to provide the Korean government with reference material in the area of economic policies regarding the EU, economic cooperation and diplomatic relations, etc.
Economic Implications of Export Control Measures and Impact on Global Supply Chain
- Review of the reasons, various forms and characteristics of export control policies through analysis of previous cases (background, response, results, etc.)
- Analysis of the economic impact and ripple effect of export control measures
- Network model constructed for break-down of export controls’ impact on global supply chains.
- Policy implications derived toward stabilization of supply chain
Effect of Direct Foreign Investment via Intellectual Property Securement on Firm Performance
- Reflecting the rising interest in global supply chain issues, the role of intellectual property (IP) as a determining factor of Korean firms’ participation in global supply chains was analyzed based on the business performance of Korean firms advancing into overseas markets through M&As, domestic employment and production levels, and business performance of affiliated firms.
- Using extensive data on M&As with foreign businesses and patent information, the effect that IP has on business performance of firms advancing overseas through M&As, and the performance levels of affiliated domestic firms, was analyzed from the perspective of: 1) purpose for advancing overseas, 2) firm size, 3) industry, and 4) entry region. The results of the analysis were incorporated into implications for industry- and national-level policies.
- Addressing the research gap left by the focus of previous studies on productivity changes according to foreign direct investment, this study aims at a juxtaposition of data on M&As and patents with detailed records on firm characteristics, region of entry, industries, etc., to perform an analysis at the micro-economic level and produce implications.
Impact Analysis of Net External Financial Assets on Market Stability and Financial Internationalization
- Korea recorded a plus value in net external financial assets for the first time on record, indicating a change in the structure of its external sector.
- The increase in both net and gross external financial assets during this period of surplus net external financial assets was analyzed in-depth for its effect on market stabilization and internationalization of financial sectors.
- Efforts to stabilize the financial market focus on the FX market (exchange rates and exchange rate volatility) and financial stress index.
- The internationalization of financial sectors centers on Transnationality Index (TNI), a quantified indicator of overseas business operation by financial firms and their capacity for international business, and Cross-Border Index.
- Review conducted of OECD and G20 nations transitioning from minus to plus net international investment position (NIIP), in particular to reference main policies and institutions of these countries
- Based on the above, policy implications derived to strengthen the Korean financial sector in terms of market stability and international capacities during a surplus period of net external financial assets
Spillover Effects of External Shocks and International Capital Flows
- Comparisons are drawn between U.S. monetary policies in response to the 2008 global financial crisis (GFC) and 2020 pandemic crisis (PC), beginning with a review of events leading up to each crisis and progress of response measures, as well as literature review of monetary normalization process and exit strategies.
- Analysis of global financial cycles following major external shocks: spillover effects of U.S. monetary policies, trade uncertainties arising from U.S.-China trade war, empirical analysis of effect caused by geopolitical risks on macro-economic variables.
- Post-crisis capital flows analyzed for the two crises. First, characteristics of international capital flows during the GFC and PC examined based on real-time news reports on changes in U.S. monetary policies as a form of high-frequency data. Second, push factors such as interest rates and growth rates of advanced economies, VIX, commodity price indices, geopolitical risks, etc., and pull factors such as the interest rates and GDP growth rates of individual countries, foreign exchange rate, openness of financial market, etc., were analyzed, also incorporating recent data updated following the pandemic crisis, to diagnose the spillover effects of these factors.
- The effect of push and pull factors analyzed as either capital flows from Korean residents or foreign capital flows
Development of Big Data-based International Macroeconomic Forecast Model
- Big data utilized to develop macroeconomic forecast model to enable effective response to changes amid economic uncertainties rising on the domestic and international front
- Use of big data-based machine learning for the development of a new forecast model that improves on previous models is mutually complementary
- KIEP plans to use the newly developed macroeconomic forecast model to produce more precise forecasts on macroeconomic indicators and conduct various analyses.
Estimation of Economic Effects of Digital Trade Rules
- Development of methodology to estimate tariffs corresponding to non-tariff trade barriers imposed by the implementation of digital trade rules
- Development of general equilibrium model that reflects characteristics of the digital economy to assess economic effects of digital trade rules
- Sample analysis of the economic effects stemming from a digital trade agreement performed, based on estimations of the effects of digital trade rules and the model constructed
Impact of Climate Clubs on Trade and the Environment
- A study on the expected benefits and risks of Korea forming or joining a multinational cooperative body for carbon-neutrality (i.e. climate club)
- Such development as Germany’s proposal in 2022 to form a climate club around G7 nations, and the U.S.’s proposal for the bloc of nations participating in the Indo-Pacific Economic Framework for Prosperity (IPEF) to begin cooperation on carbon-reducing efforts, will accompany changes in trade costs due to the adjustment of borders and stronger environment protection measures.
- The various implications for Korea to join a climate club in the name of participating in climate change response, while securing a fair chance for competition, are examined from the perspectives of international trade and trade law to provide reference material for policy-making and negotiations.
Corporate Combination and Innovation: Centered on U.S. Digital Platforms and Competition Policies
- The competition-limiting effect resulting from corporate combination of digital platforms, which has rose as an issue of interest to the U.S. competition authorities, is examined for its impact on corporate innovation, producing policy implications for the Korea’s Fair Trade Commission.
- The previous literature on corporate combination and innovation is reviewed to assess how the results of previous studies may be applied to corporate combination and innovation in the area of digital platforms.
- The study also examines how acquisitions of smaller start-ups by major digital platform companies (GAFA) over the past twenty years have affected corporate innovation. The empirical results of this analysis are offered to Korea’s competition authority as reference to establish response measures to this form of corporate combination.
Strategic ODA to Promote Connectivity with International Strategies
- Throughout the entire processes of planning, execution, and evaluation ODA projects, considerations must be made for the context of higher-level strategies and the performance of current international policies. In particular, there is a need to ensure flexibility in the system to identify new projects.
- This study aims to produce suggestions for the improvement of this system to discover new ODA projects, more specifically through: strengthening links with national strategies from the stages of execution and evaluation when ODA-implementing entities propose new projects, and implementing a system to develop and evaluate new strategic ODA programs through which compatibility with higher-level strategies and international policies can be determined.
Examination of Current State of Inequality in the International Society following Global Pandemic and Proposal of Development Cooperation Projects for Korea
- As a key goal for inclusive growth and sustainable development, the reduction of inequality is an urgent issue requiring policy coordination and international development cooperation in the face of inequalities during the post-pandemic recovery process. The rise of inequality becomes a more serious problem for developing countries than in advanced nations, thus making it an important issue for development cooperation.
- While due considerations have been made within Korea’s Third Basic Plan for International Development Cooperation, more studies must be made on the potential impact of economic growth in developing countries on cohort inequalities within each nation, as cooperation programs continue to focus on growth projects and there is a lack of research on inclusive development cooperation.
- Within this backdrop, this study aims to produce policy implications for inclusive forms of international cooperation strategies.
A Study on Response Measures to Strengthen Energy Security and Achieve Carbon Neutrality
- Exploration of global cooperation agenda to secure its energy supply and achieve carbon neutrality in the mid-to-long term
- Analysis of carbon neutral initiatives in the international society and major energy supply issues
- Analysis of climate/energy cooperation directions focusing on the Indo-Pacific region
Improving Financial Inclusion in Africa through Digital Finance
- The current state and direction of progress for digital finance in the African region are studied from the perspective of expanding financial inclusion.
- Limiting factors experienced by the financially isolated in Africa are analyzed to highlight the need for improvement in financial inclusion, and the socio-economic impact of expansion in the digital finance sector is examined.
- Reflecting recent movements to innovate digital finance, accelerated by the Covid-19 pandemic, effective measures to improve financial inclusion in Africa are presented in light of current conditions within the region, and future directions to advance digital finance are identified to produce policy implications for cooperation between Korea and Africa.
Measuring the Impact of Digital Transformation on the Labor Market in Major Countries by Industry
- As digital transformation continues in each industry, new types of economic opportunities are generated and new professions and occupations are expected to be created. At the same time, however, the issues of work replacement and technological unemployment must be addressed in the labor market.
- In this study, we explore the significance of digital transformation, a concept still lacking consensus in the literature and attempt to quantify the level of digital transformation in different industries and nations.
- The impact of digital transformation on the labor markets of major countries is analyzed, together with characteristics within the labor market that could mitigate the associated negative effects.
China’s Strategy of Fostering Small Businesses in the Age of U.S.-China Tech Competition and Implications for Korea
- Analysis of China’s strategy to cope with U.S. containment strategies in tech sectors by fostering the competitiveness of its SMEs, included as a core national strategy within the 14th Five-Year Plan, through the promotion of expertise and precise operations at distinctive and original businesses through various policies that incorporate industrial, technological, business, supply chain, innovation and financial elements
- China’s strategy of fostering strong SMEs overlaps in many areas with Korea’s nurturing strategy in the fields of materials, parts, and equipment. As competition with China is expected to intensify in these areas, analysis is needed to identify promising support policies and businesses from the perspective of establishing an independent supply chain, industrial ecosystem that promotes innovation, and system for financial support.
- As the South Korean and Chinese economies gradually transition from a mutually complementary relation toward a more competitive relationship, a comparison of competitiveness in areas China is focusing on must be made between the two economies, and effective response measures explored.
Assessment of China’s Strategies under Xi Jinping to Increase Global Influence and Implications for Korea
- As China gradually forsakes its original stance of abiding by international norms to expand its influence on the international order and gain more initiative on global issues, it becomes necessary for Korea to understand and evaluate the characteristics and feasibility of these Chinese policies to formulate effective strategy regarding China.
- Analyses are conducted on the characteristics and advancement of China’s policies to expand its influence in global economic governance. (e.g. opening of domestic institutions, participation in efforts to reform/establish global economic order, gaining the lead in digital economy governance, expanded participation in international standards, response to attempts to keep China in check)
- Also, China’s strategies to increase its influence in the diplomatic/security areas of media, culture, foreign aid, healthcare, energy, cyberspace, etc., are evaluated and analyzed, together with the OBOR and open platform strategies to achieve this goal.
The Effect of Opening Service Markets in Central & South America on GVC Participation
- There is a need to present new directions for cooperation with the Central & South American (CSA) region, with which Korea is pursuing higher levels of economic cooperation within the context of diversifying diplomatic and trade partners in the area of services.
- Investigation of CSA countries’ intra- and inter-regional service trade structures and current state and characteristics of regulations in the service market
- The impact of opening service markets in the CSA region on intra- and inter-regional trade of services and GVC participation is analyzed to identify opportunity factors for Korea.
Progression of ASEAN Economic Integration and Korea’s Response: Centered on TBT and SPS
- Intra-regional TBT, SPS measures in the ASEAN region are investigated and analyzed, while regulation distances between ASEAN members regarding TBT and SPS are measured, to identify promising tasks for cooperation which can improve utilization of the regional value chain and promote stability in supply chains for Korea firms.
- Also, the problems of TBT- and SPS-related institutions in the ASEAN region are recognized to provide Korean firms with sufficient capacity to respond to these issues.
- Approaches to ensure non-tariff measures (NTMs) do not develop into non-tariff barriers and instead contribute to public health and safety in the ASEAN region are proposed to advance economic integration in ASEAN, newly rising as a consumption market for Korean exports.
Economic Cooperation with India in the Indo-Pacific Age
- India’s recent rise in strategic importance is analyzed to highlight the need and potential for economic cooperation between Korea and India.
- Among the changing conditions, India’s main agenda for economic cooperation between with major economies is analyzed and cases studied to produce implications for Korea.
- Experts and firms in Korea and India are surveyed to understand perceptions of the potential for bilateral cooperation between the two countries, key areas, and limiting factors, etc.
- Based on these findings, Korea’s strategy, direction, major agenda and methodology for implementation of economic cooperation with India are produced.
Analysis of India’s Service Industry Structure and Plans for Industrial Cooperation with Korea
- As fluctuations continue in the international relations between the U.S., China, Russia and other major countries, India’a significance in economic and diplomatic terms continues to grow. India is evaluated as a major cooperation partner for Korea in the area of economic security.
- In this study we analyze recent structural changes in the Indian services industry based on quantitative and qualitative data, through which major industries for cooperation are identified and policies presented to expand industrial cooperation between Korea and India.
- Developments in production, employment, trade, global value chains, and foreign direct investment are further analyzed to understand structural changes in India’s services industry.
- Industrial support policies, services trade and investment conditions are analyzed to understand the background policies and industrial environment of India’s service-oriented industrial structure.
- Firm data is compiled to analyze changes in total factor productivity (TFP) in India’s manufacturing sector and service industry, which is then used to explain the servicification trend in the Indian economy and analyze productivity changes in each industry.
- Businesses are surveyed and in-depth interviews conducted with experts in related fields to understand the current situation of Korean firms advancing into the Indian services industry and demand for cooperation in the services sector.
Social Impact of Energy Subsidy Reforms in MENA Region and Implications for Korea
- Countries in the MENA region provide energy subsidies to promote social security and price stability in their domestic market.
- While these subsidies have shrunk in size due to financial constrictions, instabilities in regional conditions continue to increase, starting with Tunisia.
- Recently, inflation has pushed up the size of energy subsidies but negative views on the subsidy policies exist as new issues arise, such as the green transition and demands for social security.
- This study aims to analyze the social impact of policy reform in the area of energy subsidies, particularly in net importing MENA nations.
- At the same time, we track recent changes in energy subsidy policies caused by the Covid-19 pandemic and green transition.
The Effect of Economic Sanctions against Russia and Stabilization Plans for Korea-Russia Economic Cooperation
- The economic sanctions imposed by the West on Russia, and retaliatory measures taken by Russia in response, are analyzed by the categories of business embargos and financial sanctions, explaining the background of these sanctions and retaliatory response measures, and their implications for the economy.
- The long-term impact on Russia’s real economy is analyzed in numbers using VAR, SCM models, mostly in the area of growth rate.
- With Russian sanctions extending into the long term, this is expected to change the structure of the Russian economy, including the Russian federal government’s policies for the macroeconomy, trade and industry. Korea must identify the opportunities and risks resulting from these changes.
Analysis of North Korean Tariffs, Trade Policies and the Implications of Integration into the International Community
- This study aims to analyze the tariff and trade policies of North Korea in light of international (WTO) standards, as we explore reform measures to promote economic growth for North Korea, integration into international circles, and economic integration between the two Koreas.
- Based on estimated calculations of the tariff system, tariff rates, size of tariff income in North Korea, North Korean refugees currently employed in the trade sector were interviewed to gain further insight into operations of the North Korean tariff system, making this the first attempt to quantify North Korea’s tariff rates.
- North Korea’s tariff rates are compared against South Korea during the 1960s to 1980s, Vietnam in the 2000s, when it became a WTO member, and China in the 1990s, when it joined the WTO. Based on these comparisons, tariffs in socialist regimes and the role played by trade policy, correlation with regime change, and tariff rate strategies to drive economic growth are examined.
- The necessary changes in North Korea’s tariff and trade policies to gain membership in the WTO are studied.
- Current issues blocking the two Koreas from integrating their tariff and trade policies are examined.
Ad Hoc Studies on Current Issues
- Policy analyses conducted to provide timely response to policy demands in the government sector, initial theoretical or issue-based studies conducted to enable quality policy research.
- Issue papers promptly released and circulated to government agencies in response to current issues and trends in the global economy.