Earticle

In comparison with other nations, the roles of Big Trading Houses (BTHs) become increasingly important in Korea because the country heavily relies on foreign trade. Considering its industrial structure, Korea has no choice but depending on international trade than any other nations. This paper theoretically examines the raison d'etre of BTHs in Korea. As Korea has pursued export-oriented policy since the early 1960s, BTHs have performed important roles to promote national economic growth. Until today, only a few papers investigated BTHs' nature and functions from theoretical viewpoints. This paper, thus, explains the reasons for their existence by adopting the following four theoretical frameworks; 1) a theory of financing advantage of trade credit, 2) a theory of international trade with intermediaries, 3) a theory of transaction cost, and 4) a law of increasing returns to scale.

Since movies are experience goods, consumers are easily influenced by other consumers’ behavior. For moviegoers, box office rank is the most credible and easily accessible information. Many studies have found that the relationship between a movie’s box office rank and its revenue departs from the Pareto distribution, and this phenomenon has been named “increasing returns to information.”The primary objective of the current research is to apply the empirical model proposed by De Vany and Walls (1996) to the Korean movie market in order to examine whether the same phenomenon prevails in the Korean movie market. The other purpose of the present study is to provide managers with useful implications about the release timing of a movie by finding different curvatures that depend upon seasonality. The empirical test on the Korean movie market shows similar results as prior studies conducted on the U.S., Hong Kong, and U.K. movie markets. The phenomenon of increasing returns is generated by information transmission among consumers, which makes some movies become blockbusters and others bombs. The proposed model can also be interpreted in such a way that a change in the rank has a nonlinear effect on the movie’s performance. If a movie climbs up the chart, it would be rewarded more than its proportion. On the other hand, if a movie falls down in the ranks, its performance would drop rapidly. The research result also indicates that the phenomenon of increasing returns occurs differently depending on when the movies are released. Since the tendency of the increasing returns to information is stronger during the peak seasons, movie marketers should decide upon the release timing of a movie based on its competitiveness. If a movie has substantial potential to incur positive word-of- mouth, it would be more reasonable to release the movie during the peak season to enjoy increasing returns. Otherwise, a movie should be released during the low season to minimize the risk of being dropped from the chart.

A two-part model is estimated to see if increasing returns and comparative advantage are empirically equivalent in explaining intra-industry trade. The model has separate mechanisms for determining the occurrence and the extent of intra-industry trade. Estimation is based on an augmented Grubel-Lloyd index derived from the data set on SITC 7 goods at the 3-digit SITC (Revision 4) for country pairs in which Korea is fixed as a source country. Estimation results show that both increasing returns and comparative advantage can explain the occurrence and the extent of intra-industry trade.

This paper studies the short-run and long-run behavior of a competitive economy in which both the discount factor and technological change are endogenously determined. In particular, the effect of saving behavior on persistent economic growth is considered. The paper provides the sufficient condition on the rate of impatience and the concavity of private technology for uniqueness and local stability of the steady state in the competitive economy. The condition implies determinacy of transitional equilibrium paths. However, the paper also shows that the presence of externalities and adjustment cost of investment can lead to indeterminacy of steady state equilibra

In this paper, we explore the effect of the COVID-19 (Coronavirus Disease-19) outbreak on consumer behaviors in the Korean popular music market by adopting the model of increasing returns to information. As music is an experience good, we expect that increasing returns to information do exist in the Korean music market. We also posit that the COVID-19 outbreak affects consumers’ music choice and consumption behaviors so that the overconcentration in the music market is diminished. We suggest two conceptual backgrounds for such a reduction in overconcentration. First, at the market level, the music consumption by low-involved consumers may be decreased and the proportion of the contribution from high-involved consumers may be increased after the outbreak. Second, at the individual consumer level, consumers may have a lower deliberation cost and a lower search cost due to the COVID-19 outbreak. We argue that the magnitude of increasing returns to information is reduced through these forces resulting from the COVID-19 outbreak. Using data from the Gaon chart, the official music chart operated by the Korea Music Content Association, we find empirical evidence of the existence of increasing returns to information in the Korean popular music market. More importantly, we find that the COVID-19 outbreak has reduced the magnitude of increasing returns to information. This study is among the first empirical studies that investigate the effect of the COVID-19 outbreak on consumer behaviors in Korea. It contributes to the literature by providing a modeling approach to investigate the impact of an exogenous shock on increasing returns to information. This study also contributes to the field of marketing by advancing substantial knowledge on increasing returns to information in the music market which has not been explored much in the field. We also suggest practical implications for digital music platforms, producers, and artists in the era of the COVID-19.

본 연구는 Ijiri and Simon (1974)가 제안한 수확 체증 모형을 확장하여 국내 대중음악 시장을 계량적으로 분석하였다. 음악은 경험재의 성격을 갖기 때문에 소비자들은 다른 소비자의 구전에 민감하게 반응한다. 이에 따라 차트에서 높은 순위를 기록하는 음악 상품일수록 그 자체로 자기상관적 성장을 기대할 수 있다. 이를 기반으로 본 연구는 국내 대중음악 시장에 이른바 정보적 수확 체증 현상이 존재한다고 예측하고, 이를 써클 차트(Circle chart) 데이터를 수집하여 분석함으로써 실증하였다. 추가적으로, 음악에 대한 주목을 분산시킬 수 있는 대체재가 등장할 경우, 음악 시장에 존재하는 저관여 소비자들이 일시적으로 이탈함에 따라 정보적 수확 체증 현상이 감소할 것으로 예상하였다. 대중음악의 매력적인 대체재로서 본 연구는 2022년 개최된 대형 국제 스포츠 이벤트인 베이징동계올림픽과 카타르월드컵의 개최 효과에 따른 시장의 반응을 분석하여, 일시적으로 정보적 수확 체증이 완화됨을 실증하였다. 본 연구는 국내 대중음악 시장에 정보적 수확 체증 현상이 존재한다는 사실을 규명한 소수의 연구 중 하나로서, 대체재의 위협이 대중음악 시장에 어떠한 영향을 미치는지 계량적으로 분석했다는 점에서 학술적 의의를 가진다. 실무적 시사점으로서 대중음악 시장 구조와 아티스트 유형에 따른 마케팅 전략 또한 논의한다.

This study attempts to explore the Korean popular music market by utilizing the model proposed by Ijiri and Simon (1974). As music is an experience good, we expect that increasing returns to information do exist in the Korean music market. Moreover, we expect substitute goods, such as sports events, to significantly affect the music market by reducing the magnitude of increasing returns to information. This is because the low-involved consumers in the market can be distracted by international events with high quality, such as the Olympics and World Cup, and they may exit the market in the short- or mid-term . Using the data from the Circle Chart, we find that increasing returns to information exist in the Korean music market. The results also show that this phenomenon can be mitigated by substitute goods, which refers to international sports events in this study. This study is one of the few studies to demonstrate the existence of increasing returns to information in the Korean music market. And it is also one of the few studies to assess the effect of substitute goods on the Korean popular music market. We discuss practical implications for the music industry and artists as well.

최근 수확불변 하에서의 오염처리비용회피활동(pollution haven activities)에 대한 연구는 많이 진행되어 왔으나 수확체증 하에서의 연구는 미미한 실정이다. 1990년대 이후 수확체증 하에서의 교역이론이 산업 재배치에 대한 문제를 다루면서 수확체증과 오염처리비용회피활동 간의 관계를 살피는 것은 의미 있는 일이다. Davis(1998)가 발표한 수확체증 하에서의 자국시장효과(home market effect)에 대한 모형을 응용하여 환경정책이 산업 재배치에 주는 효과를 분석한 결과 시장규모가 적은 지역에서 오염물처리에 대한 책임을 생산자가 담당하는 지역과 시장규모가 크면서 오염물로 인한 비효용을 거주자가 감내하는 지역과의 교역상황에서 교역장벽이 높을 때 일부 공해산업에 대해 오염처리비용회피효과가 존재하나 교역장벽이 낮아지면서 공해산업뿐만 아니라 저공해산업에서도 산업의 지역이탈이 관찰되어 오염처리비용회피활동에 대한 식별이 힘들어지며 오염처리비용회피효과(pollution haven effect)뿐만 아니라 오염처리비용회피가설(pollution haven hypothesis)이 동시에 성립됨을 보일 수 있었다. 따라서 시장규모가 작으나 환경보전가치가 높아 환경규제가 강한 지역에서 환경보전과 지역경제발전을 동시에 도모하기 위해서는 오염처리기술의 생산성을 높이기 위한 활동이 필수적이다.

The demand for the study about the pollution haven activities under increasing return to scale is increasing since the trade theory under increasing return to scale has been developed. In this paper, based on Davis(1998)?s argument about home market effect, pollution haven activities under increasing return to scale is developed. The result shows that pollution haven effect can be identified with the high trade barriers. When the trade barriers are lowered, both pollution haven effect of heavy polluted industries and migration of low polluted industries are mixed together. Even the behavior under pollution haven hypothesis and that of pollution haven effects are co-existed. Therefore, to keep both environmental protection and continuous economic development, the local government of the region with high environment preservation value encourages the productivity increase of the environmental technique.

이 논문은 기술 채택의 수익이 체증하는 체제 하에서 사용자들의 선택과 작은 사건들이 기술간 경쟁의 결과에 미치는 영향을 연구하였다. 두 기술 간의 경쟁에 대한 Arthur의 모형을 확장하여 세 기술이 경쟁하는 경우와 기술의 사용자들이다양한 형태의 수익함수를 갖는 상황을 모형화 하였다. 이를 이용하여 다양한 수익 체제 하에서 시간에 따라 기술들의 시장 점유율이 변하는 유형들을 제시하였으며, 그 결과로부터 전략적․정책적 함의를 도출하였다. 우선 경쟁하는 기술이 늘어나도 기술 채택의 수익이 절대적 사용자 수에 비례하여 증가하는 경우 수익이 체감, 불변, 또는 체증하는 체제가 갖는 차별적인 특성이 유지됨을 확인하였다. 반면, 기술 채택의 수익이 사용자 수에 따라 비례적으로증가하지 않는 경우에는 수익 체증의 체제가 갖는 특성이 부분적으로 유지되었다. 또한 기술 채택의 수익이 상대적 사용자 수 또는 기술의 시장 점유율에 비례하여 증가하는 경우에는 기술 채택의 수익률과 기술에 대한 선천적 선호의 상대적크기에 따라 경쟁 기술 중 한 기술이 시장을 독점하는 형태가 나타나지 않을 수도 있다. 둘째, 기술 사용에 따른 학습효과가 시간이 지남에 따라 감소하는 시장에서 한 기술이 시장을 독점하는 현상이 항상 발생하지 않으며, 어느 한 기술이 초기에 1/2의 시장 점유율을 가지는 일부의 경우에서는 그 기술에 고착되는 현상이 지속될수도 있었다. 따라서 이 논문은 기업이 최종적으로 높은 시장 점유율을 확보하기 위해서 경쟁의 초기 단계에서 기술의 사용자를 유인하고 기술 사용에 따른 학습 효과를 지속적으로 활용하는 것이 필요함을 보였다. 시장에서 사용자를 고착화시키기 위해서 선도자의 이점을 활용할 수 있어야 하는데, 고착화의 가능성은 수익 함수의 형태와 기술 채택의 수익률과 기술에 대한 선천적 선호의 상대적 크기에 의존하는 것으로 나타났다. 마지막으로, 수익이 체증하는 체제 하에서 초기 단계에서 일시적인 정부의 개입이나 기업의 실패와 같은 사건이 시장 구조의 변화에 큰 영향을 미칠 수 있음을 구체적으로 보였다. 이런 결과는 수익 체증의 체제 하에서 특히 시장의 초기 단계에서 발생한 작은 사건이 시장 결과에 중요한 영향을 미칠 수 있음을 기업들이 인지해야 함을 시사한다. 또한 수익이 체증하는 체제 하에서 정부의 개입이 필요한 경우에 초기에 작은 규모지만 시의적절하고 주의 깊은 개입으로 시장진화 상황을 바꿀 수 있음을 시사하고 있다.

This paper investigates how the choice of users and small events affect the market structure under increasing returns to technology adoption. This study extends the simple model of Arthur (1989) and illustrates patterns of changing market shares under different regimes of returns to technology adoption. This paper analyzes simulation results concerning an adoption of three competing technologies and derives implications of strategies and policies from the results. First, this paper confirms that distinct properties of diminishing, constant and increasing returns are maintained when the returns of users are proportional to the number of users even though more than two competing technologies exist in the market. On the contrary, this paper demonstrates that properties of increasing returns are partially maintained when returns are disproportionate to the number of users. This paper also shows that the properties of increasing returns cannot hold when returns to technology adoption increase with the market share of technology. In the latter case, increasing returns to adoption do not necessarily result in a convergence to technological monopoly. Second, it is not the case that one of competing technologies always tends to monopolize the market in which the effect of learning-by-using decreases exponentially with time. If a technology had half of the market share first, the market would be locked-in to that technology afterwards in the end. Therefore, this paper finds that it is necessary for firms to attract adopters of their technology at an earlier stage of competition and to utilize the learning from users continuously in order to maintain a dominant position in the market under increasing returns. Lock-in requires firms to utilize first-mover advantages, and the likelihood of being locked-in depends upon the types of returns function and the relative size between a natural preference for technology and the rate of returns to technology adoption. Finally, this paper shows that historically small events such as a temporary intervention of government and failure of firms in the initial period can have a significant influence on the market structure under increasing returns. This result suggests that firms should recognize the influence of small events on the market outcome under increasing returns, especially during early stages of competition. Moreover, this implies that a careful intervention by central authorities with the right timing in necessary cases can change the evolution of markets under increasing returns even if the scope of the intervention is small.