TY - JOUR
T1 - Participation in the Kaesong Industrial Complex and its impact on productivity
T2 - South Korean textile firms’ experiences
AU - Cho, Sungtaek
AU - Kwak, Do Won
AU - Lee, Hongshik
N1 - Publisher Copyright:
© 2019 Elsevier B.V.
Copyright:
Copyright 2019 Elsevier B.V., All rights reserved.
PY - 2020/3
Y1 - 2020/3
N2 - This paper examines the effects of participating in the KIC on firms’ productivity using firm-level data from 1998 to 2012, focusing on the textile sector. To do this, we implemented PSM estimations employing the radius matching method with 0.01 caliper and 10nearest-neighbor matchings with replacement. We found 100 matched firms in control groups(domestic firms) that corresponded to each of the 10 treated firms. For analysis, we used a difference-in-differences (DID) framework and extended the basic DID framework to the event study framework of Gathmann et al. (2018). The results reported that the treated firms experienced the increased sales but the improvement in sales had not lead to improvements in productivity. These results can be found in the DID event study as well as the DID analysis. That is, improvement in productivity through FDI cannot be found in the empirical results.
AB - This paper examines the effects of participating in the KIC on firms’ productivity using firm-level data from 1998 to 2012, focusing on the textile sector. To do this, we implemented PSM estimations employing the radius matching method with 0.01 caliper and 10nearest-neighbor matchings with replacement. We found 100 matched firms in control groups(domestic firms) that corresponded to each of the 10 treated firms. For analysis, we used a difference-in-differences (DID) framework and extended the basic DID framework to the event study framework of Gathmann et al. (2018). The results reported that the treated firms experienced the increased sales but the improvement in sales had not lead to improvements in productivity. These results can be found in the DID event study as well as the DID analysis. That is, improvement in productivity through FDI cannot be found in the empirical results.
KW - Difference-in-differences
KW - Event study
KW - Kaesong Industrial Complex (KIC)
KW - North Korea
KW - Propensity matching score
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U2 - 10.1016/j.japwor.2019.100995
DO - 10.1016/j.japwor.2019.100995
M3 - Article
AN - SCOPUS:85076029538
SN - 0922-1425
VL - 53
JO - Japan and the World Economy
JF - Japan and the World Economy
M1 - 100995
ER -