Earticle

This paper examines the causal relationship between foreign policy and industrialization of South Korea in 1970s. The result shows that for the late-industrializing countries need foreign policy intervention to develop industrialization due to the external constrain. South Korean foreign policy change to Saudi Arabia after the first oil shock in 1973 presented that the change was consolidated more by external constrain rather than internal domestic energy dependent situation. During the Cold war foreign policy of allied small states of two superpowers were hard to implement its interest both in political and economic sense. South Korean foreign policy shift to pro- Israeli to pro-Arab is specific in its independent behavior in limited environment under the powers. This shift was one of the South Korean independent foreign policy achievements to support the economy by making political step against the interest of United States. Without making foreign policy change and foreign policy backup for national companies, South Korean export-oriented industrialization strategy was difficult to sustain. Special emphasis goes to preconditions: external constrains and resources that requires foreign policy intervention. Why foreign policy role is increasing to develop industrialization for the late industrializing countries? Next question of the section is how does the foreign policy connect to economic development and energy?

The purpose of this study is to examine the relationship between the stock market movement and macroeconomic variables in Mongolia and Korea. It is interesting and important to understand the relationship between the stock market and macroeconomic variables of Mongolia as a just developing stock market. The analysis was based on the Engle Granger methodology with the framework of the Vector Error Correction model (VECM). To do this, the unit root test and cointegration analysis were examined. The data are based on the period of January, 2000 to December, 2009 in the case of Mongolia, and from January, 2002 to December, 2009 in the case of Korea. Macroeconomic variables include Consumer price index (CPI), Interest rate of one year savings (IR), Money supply (M2) and Exchange rates: US dollar for both countries and Korean won for the case of Mongolia. There were a long-rung relationship between the stock market and macroeconomic variables environment, in the two countries. The unit root test results show that all variables are non-stationary at level, but they were stationary at first difference. The cointegration test result showed that there was one cointegration in Mongolian data, and two cointegrations in Korean data. Finally, from the Granger causality test results, Mongolian stock prices cause to the money supply and CPI. In the case of Korea, there were bidirectional causality between the stock prices and the interest rate. Therefore, all macroeconomic variables cause to the stock prices by unidirectional way.

While linguistic differences impede international trade by creating communication barriers, linguistic heterogeneity is likely to facilitate trade for at least two reasons. First, the scope of comparative advantages will be wider in case the trading partners represent a linguistically heterogeneous environment as a whole. Second, linguistically heterogeneous countries will be more successful dealing with the communication barriers arising as a result of linguistic differences. Using a sample of East and South Asian economies we find empirical evidence in support of the two heterogeneity hypotheses, at the same time confirming the negative effect of linguistic differences found in earlier studies.