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The purpose of this paper is to empirically analyze the effect of the increasing connectedness among financial institutions in the Korean financial market, as it affects the market microstructure in the stock market. Thus this work, first, analyzes the trend and characteristics of connectedness in the Korean financial sector. This work then demonstrates the impacts of connectedness on volatility and price discovery in the stock market.

The entire Korean financial sector is analyzed from January 1990 to July 2015, including the periods of the 1997 Asian crisis and the 2007/2008 global financial crisis. This paper quantifies the connectedness between financial institutions using network methodology. Densely connectedness specifically refers to the cases in which a node experiences strong-lagged return spillover from and/or to itself.

Connectedness is established as an important determinant of stock price discovery. This paper illustrates that connectedness increases on significant economic events such as the 1997 Asian crisis and the 2007/2008 global financial crisis. Furthermore, this paper demonstrates that the more densely connected a particular financial institution, the more volatile the stock price and the less accurate the stock price quality.

Understanding the financial system from a network perspective has been on the rise after the 2007/2008 global financial crisis. This work helps regulators and policy makers understand the full implications of introducing new policies that can more closely connect financial institutions.

This paper precisely captures financial institutions’ connectedness by including all types of financial institutions at the micro level. Additionally, this paper links connectedness to market microstructure in the stock market.

This study reveals how a Korean monetary transmission mechanism evolves in the tumultuous decade of the 1990s. We show that (i) contractionary monetary policy shocks have more explanatory power for the post‐crisis periods than for the pre‐crisis period; (ii) the effects on output from external shocks attributed to the oil price and the U.S. federal fund rates are mixed; (iii) there is little positive spillover effect from the U.S. to Korea through the trade channel; and (iv) there is a positive spillover effect from the international capital market channel.

The Korean Government wishes to transform the nation into a Northeast Asian business hub. Following economic crisis, there are attempts to move the economy towards a new market‐oriented paradigm of economic growth based on foreign direct investment (FDI) and market friendly transparent corporate governance, replacing the old model of the developmental state, involving intimate and opaque business‐government relations, which has dominated Korean policy for at least three decades. This paper presents findings from 37 interviews conducted with senior executives of foreign companies and various chambers of commerce in Korea. The paper offers new insights into the critical and often invisible issues which need to be confronted and successfully resolved for the transformation of Korea. In providing a critical analysis, the paper examines alternative interpretations of the hub concept, key advantages offered by Korea, the main barriers to becoming a hub, competition from other locations and draws lessons for government policy makers.

The study aims to verify and compare the relationship of consumer innovativeness and technostress for FinTech usage behavior of Korean and Chinese Gen Z consumers.

The study proposes an integrative causal model derived from consumer innovativeness, technostress, and FinTech usage intention of the Korean and Chinese Gen Z consumers and test the causal relationships using structural equation modeling (SEM).

The study results showed that social innovativeness negatively affected the three dimensions of technostress and had a significant positive impact on FinTech usage intention for all samples. Hedonist innovativeness had no significant positive impact on FinTech usage intention for all samples, but it differently affected the three sub-dimensions of technostress (uncertainty, invasion, and complexity) for each sample.

This study presents nascent literature on the causal relationships of consumer innovativeness, technostress, and FinTech usage behavior for Korean and Chinese Gen Z consumers.

This paper aims to investigate whether the establishment of commodity futures can effectively hedge systemic risk in the spot network, given the context of financialization in the commodity futures market.

Utilizing industry association data from the Chinese commodity market, the authors identify systemically important commodities based on their importance in the production process using multiple graph analysis methods. Then the authors analyze the effect of listing futures on the systemic risk in the spot market with the staggered difference-in-differences (DID) method.

The findings suggest that futures contracts help reduce systemic risks in the underlying spot network. Systemic risk for a commodity will decrease by approximately 5.7% with the introduction of each corresponding futures contract, since the hedging function of futures reduces the timing behavior of firms in the spot market. Establishing futures contracts for upstream commodities lowers systemic risks for downstream commodities. Energy commodities, such as crude oil and coal, have higher systemic importance, with the energy sector dominating systemic importance, while some chemical commodities also have considerable systemic importance. Meanwhile, the shortest transmission path for risk propagation is composed of the energy industry, chemical industry, agriculture/metal industry and final products.

The paper provides the following policy insights: (1) The role of futures contracts is still positive, and future contracts should be established upstream and at more systemically important nodes in the spot production chain. (2) More attention should be paid to the chemical industry chain, as some chemical commodities are systemically important but do not have corresponding futures contracts. (3) The risk source of the commodity spot market network is the energy industry, and therefore, energy-related commodities should continue to be closely monitored.

The purpose of this paper is to critically examine the sources of inefficiency in the Korean banking sector. The present study focuses on three different approaches: intermediation approach, value‐added approach, and operating approach, to differentiate how efficiency scores vary with changes in inputs and outputs.

The paper utilizes the non‐parametric data envelopment analysis methodology to measure the efficiency of banks operating in the Korean banking sector. The method allows for the decomposition of technical efficiency (TE) into its mutually exhaustive components of pure technical and scale efficiencies.

The empirical findings suggest that estimates of TE are consistently higher under an operating approach vis‐à‐vis the intermediation and value‐added approaches. On the other hand, banks are characterized by a relatively low level of TE under the intermediation approach.

Further analysis on the performance of the Korean banking sector performance will examine the efficiency changes over time by employing the parametric stochastic frontier analysis method. Investigations into productivity changes over time, as a result of a technical change or technological progress or regression by employing the Malmquist productivity index could yet be another extension to the paper.

The findings from this study are essential not only for the managers of the banks, but for numerous stakeholders such as the central banks, bankers associations, governments, and other financial authorities. Knowledge of these factors would also be helpful to the regulatory authorities and bank managers who formulate going forward policies for improved efficiency of the Korean banking sector.

Unlike the previous studies on the efficiency of the Korean banking sector, the paper focuses on three different approaches: intermediation approach, value‐added approach, and operating approach to differentiate how efficiency scores vary with changes in inputs and outputs.

This paper examines the statistical relationship between outbound Foreign Direct Investment (FDI) and firm performance. We focus on how the link is influenced by sector-specific differences and geographical factors.

We compile a time-series cross-sectional dataset that includes financial variables and FDI activities of South Korean firms between 2005 and 2008 from the DART, a financial statement database. Then, we fit our data against the linear regression models that we designed to identify FDI-performance relationship in different subsamples. Our measurement of firm performance is specifically constructed to reflect excess returns in the stock market.

We found compelling differences in the degree of FDI-performance relationships across different industries. In manufacturing sectors, the flow of direct investment is more heavily associated with firm performances than accumulated stock of direct investment, and vice versa in the service sector. The impact of China factors toward performance aspects of Korea’s outbound FDI which also differs across sectors as well.

Although there have been extensive research efforts on this subject in general, our paper addresses an increasingly significant class of FDIs that have received relatively less attention, that is, direct investment originating from developing economies. Also, our analysis adds a sectoral dimension that contributes to more comprehensive understanding of a multinational-performance relationship.

With their national economy rapidly and structurally turning away from the long-cherished stable employment regime since the national financial crisis, South Koreans’ poverty is increasingly manifested through financial entrapment ensuing from heavy personal indebtedness to banks, kin members and friends, and, the worst of all, private usurers. The world’s once most aggressively saving population turned into one of the world’s most indebted populations merely in a decade. Having lost its once-proud capacity of a developmental state, the South Korean government has instead been busy devising various public schemes for offering grassroots consumer loans in supposedly preferential terms. Consumer credit, instead of social wage, has been offered rather generously by this increasingly neoliberalized state. This is another crucial component of financialization in the contemporary world political economy. South Korea’s emergency measures for escaping the national financial crisis have paradoxically ended up transplanting the financial trouble from banks and industrial enterprises to grassroots households.

The authors estimate systemic risk in the Korean economy using the econometric measures of commonality and connectedness applied to stock returns. To assess potential systemic risk concerns arising from the high concentration of the economy in large business groups and a few export-oriented sectors, the authors perform three levels of estimation using individual stocks, business groups, and industry returns. The results show that the measures perform well over the study’s sample period by indicating heightened levels of commonality and interconnectedness during crisis periods. In out-of-sample tests, the measures can predict future losses in the stock market during the crises. The authors also provide the recent readings of their measures at the market, chaebol, and industry levels. Although the measures indicate systemic risk is not a major concern in Korea, as they tend to be at the lowest level since 1998, there is an increasing trend in commonality and connectedness since 2017. Samsung and SK exhibit increasing degrees of commonality and connectedness, perhaps because of their heavy dependence on a few major member firms. Commonality in the finance industry has not subsided since the financial crisis, suggesting that systemic risk is still a concern in the banking sector.