About
I am an applied microeconomist in the Department of Economics at National Taiwan University, with a specialization in Industrial Organization. My research agenda involves using a detailed firm-level dataset to estimate how firms' dynamic decisions affect industry performance, both in individual and strategic contexts.
You can find my CV .
Education :
Ph.D. in Economics, 2023, The Pennsylvania State University
M.A. in Economics, 2017, Korea University
B.A. in Economics, 2015, Korea University
Contact Information :
Department of Economics
National Taiwan University
No.1, Sec 4, Roosevelt Road, Taipei, 10617 Taiwan
Tel: +886-2-3366-8389
Email: jkhong@ntu.edu.tw
Working Papers
Abstract
This study examines whether exporting enhances efficiency and favors specific inputs. We develop a production function model within a dynamic exporting and investment framework, capturing factor-biased technical changes. Using Kalman filtering to address measurement error and propensity score matching to control for self-selection into exporting, we analyze Colombia’s manufacturing sectors from 1981 to 1991. New exporters achieve a 4% annual increase in labor-augmenting and unskilled labor relative productivity, with no change in Hicks-neutral productivity. Unskilled labor-augmenting productivity grows by 8% annually, aligning with machinery asset expansion, while TFP rises by 3% per year.
Abstract
In this study, we evaluate the reproducibility and replicability of Scott Orr’s (Journal of Political Economy 2022; 130(11): 2771–2828) innovative approach for identifying within-plant productivity differences across product lines. Orr’s methodology allows the estimation of plant-product level productivity, contingent upon a well-behaved pre-estimated demand system, which requires carefully chosen instrumental variables (IVs) for output prices. Using Orr’s STATA replication package, we successfully replicate all primary estimates with the ASI Indian plant-level panel data from 2000 to 2007. Additionally, applying Orr’s replication codes to a sample from 2011 to 2020 reveals that the suggested IVs do not perform as expected.
Abstract
I study how sunk entry costs affect the long-run market outcomes when entrants irreversibly choose their scale. In this environment, entry costs can influence both the long-run number of competitors and the industry's scale distribution. Developing and estimating a dynamic game of entry and scale choices, I evaluate this channel in the context of a land-use deregulatory reform in the South Korean cinema chain industry. The deregulation is estimated to act as an entry subsidy, appealing to larger-scale theaters. Despite this subsidization effect, the industry's total firm value is 5.6 percent less than it would have been without the reform due to intensified competition and increased expenses on fixed operating costs from the expansion of larger-scale theater. This implicit cost of the deregulation is not uncovered by the model with entry choices alone, as it obscures the shift in the distribution toward a larger scale.
Abstract
This paper estimates a dynamic model of the firm's joint export and import decision process. In the model, participating in trade improves within-period profits and future productivity. In addition, doing one trade activity facilitates the other by reducing the associated fixed/sunk costs. Employing a Bayesian MCMC estimator, I fit the model to Colombian chemical plant panel data from 1981 to 1985. Two findings stand out: (i) importing increases future productivity significantly while exporting does not. (ii) importing facilitates exporting by lowering the sunk costs of entering the export market, while exporting facilitates importing by decreasing the fixed costs of continuing import. A counterfactual simulation shows that subsidizing the fixed costs of importing is the most effective among trade cost subsidy schemes in improving the average productivity and firm value.
Work in Progress
Stay or Leave?: Online Banking, Merger, and Dynamics of Bank Branches (with Minsung Park)
Description
We study the effects of a merger on banks' decisions to close brick-to-mortar branches in response to the rise of online banking. Online banking tends to lead to reduced demand for branch services, but the responding branch reduction can be inefficiently slow when banks strategically delay closures to outlast competing branches. A merger can expedite branch closures for the merging banks by internalizing such business-stealing motives. However, non-merging banks might free-ride on this effort, slowing the overall branch reduction. Leveraging a 2015 merger between two mega banks in South Korea, we aim to capture this trade-off in the South Korean banking industry from 2010 to 2019. Our difference-in-differences framework reveals a 25 percent reduction in branches for the merging bank in local markets directly affected by the merger. In contrast, non-merging banks only reduce branches by 4 percent in the same markets, underscoring the significant impact of free-riding motives. Inspired by this evidence, we plan to develop and estimate a dynamic game of strategic branch opening-closure to quantify the welfare implications of the merger and assess the relative importance of two countervailing strategic motives.
Publications in Korean
Multiple of Credit Guarantee Operation as a Facilitator of Aggressive Credit Supply (with Jaesung Park), Journal of SME Finance, Volume 41, Number 1, April 2021
Encouraging Employment, Techonology Innovation and Profitability of SMEs (with Jaesung Park), Korea Review of Applied Economics , Volume 22, Number 2, June 2020
Decomposition of the Business Cycle Shock and the Default Rate of SMEs in Korea (with Jaesung Park and Sumi Na), Journal of Derivatives and Quantitative Studies , Volume 27, Number 4, November 2019
