nep-inv New Economics Papers
on Investment
Issue of 2023‒12‒04
nine papers chosen by
Daniela Cialfi, Università degli Studi di Teramo

  1. KIET Manufacturing Business Survey Index (BSI) for Q3 2023 By Han, Jung Min
  2. Korean Defense Exports in an Era of Conflict: Opportunities and Challenges By Sim, Soonhyung; Kim, Mi Jung
  3. Heterogenous effects of milk price volatility on French dairy farms economic viability: roles technological equipment uses By Marie Rose Randriamarolo-Malavaux
  4. Estimation of Semiparametric Multi-Index Models Using Deep Neural Networks By Chaohua Dong; Jiti Gao; Bin Peng; Yayi Yan
  5. Despite disruptions, US-China trade is likely to grow By Megan Hogan; Gary Clyde Hufbauer
  6. Economic usefulness of older workers in terms of productivity in the modern world By Janis Kudins
  7. Correlation and Partial Correlation REIT Portfolios By Stephen Lee
  8. Unravelling the layers of teachers’ work-related stress By OECD
  9. IAB-Prognose 2023/2024: Konjunkturflaute dämpft den Arbeitsmarkt By Bauer, Anja; Gartner, Hermann; Hellwagner, Timon; Hummel, Markus; Hutter, Christian; Wanger, Susanne; Weber, Enzo; Zika, Gerd

  1. By: Han, Jung Min (Korea Institute for Industrial Economics and Trade)
    Abstract: The overall composite Business Survey Index (BSI) for the manufacturing sector in the third quarter (Q3) of 2023 remained below the base- line (100). Moreover, most feeder indices have decreased compared to the previous quarter. Specifically, sales (82), domestic demand (81), and exports (87) in the manufacturing sector have fallen significantly in this quarter. And business conditions (84), ordinary profit (83), facilities investment (96), operation ratio of facilities (92), employment (96), and financial conditions (81) also declined slightly compared to Q2. The BSI outlook for Q4 2023 indicates that manufacturers expect business conditions and sales to be similar to the previous quarter. Indices for business conditions (95) and sales (97) are the same as they were in the previous quarter. Thank you for reading this abstract of a report from the Korea Institute for Industrial Economics and Trade! Visit us on YouTube: Visit us on Instagram: Visit our website:
    Keywords: industrial projections; economic projections; trade projections; economic outlook; Korean economy; Korean industry; KIET; Korea
    JEL: E66 F17 F47
    Date: 2023–10–31
  2. By: Sim, Soonhyung (Korea Institute for Industrial Economics and Trade); Kim, Mi Jung (Korea Institute for Industrial Economics and Trade)
    Abstract: In 2022, South Korea achieved an unprecedented milestone in defense exports, as orders surged to an impressive USD 17.3 billion, a record- breaking achievement in its history as an arms exporter. This remarkable growth can be attributed to growing global defense expenditures in the wake of the Russia-Ukraine war and the increased demand in Europe. The military aid to Ukraine created shortage of defense products, which has further increased demand. The Korean defense industry has capitalized on this opportunity, bolstered by its competitive edge in swift product delivery, a well-established mass production infrastructure, and an outstanding price-to-quality ratio. Of note is the surge in demand for Korean arms from Eastern European nations, which has propelled the country into the ranks of the world’s top five defense exporters. Future export prospects are promising. Global defense spending is expected to continue its upward trajectory amid the escalating geopolitical crisis in Europe, despite the effects of the COVID-19 pandemic and slowing economic growth. Germany, for instance, has decided to invest EUR 100 billion in a special defense fund to modernize and expand its armed forces. Furthermore, defense spending as a percentage of GDP in Eastern Europe and the three Baltic states is poised to exceed the NATO requirement of two percent by 2024. Should the current trend persist, Korea could eventually rank among the world’s top four defense exporters. However, achieving this goal will necessitate a nuanced and refined policy approach. Conducting a comprehensive assessment of the economic impact of growing defense exports is the first step toward positioning the defense industry as a driver of growth. In this paper, I project changes in defense sales and employment under the assumption that the value of annual export orders eventually reaches USD 20 billion. Furthermore, I offer a set of policy recommendations aimed at propelling Korea into the upper echelons of the world’s defense exporters and harnessing the full potential of the burgeoning defense industry as an engine of economic prosperity. Thank you for reading this abstract of a report from the Korea Institute for Industrial Economics and Trade! Visit us on YouTube: Visit us on Instagram: Visit our website:
    Keywords: defense sector; defense industry; defense spending; defense manufacturing; defense contracting; arms exports; weapons exports; Russia-Ukraine war; defense sector employment; arms trade; manufacturing; Korea
    JEL: F17 F52 L64 O38
    Date: 2023–10–31
  3. By: Marie Rose Randriamarolo-Malavaux (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle)
    Abstract: In a context of increased milk price volatility and dairy farm modernization, our study aims to shed light on whether the costs associated with the financial investments made when acquiring technologies and their maintenance costs exacerbate the damage suffered when the price becomes volatile, or whether the expected productivity gains actually help to cope with this market hazard. To do this, we distinguish three farm categories according to three separate variables that approximate the level of technological tools used. Then, we estimate the variation in the level of viability of each group when price volatility changes. We apply fixed effect ordered logistic regression on data gathered from the French farm accountancy data network from 2002 to 2020. Sample is divided into three categories according to their levels of intensification and use of technological tools. We estimated separately the viability models of each category to check for heterogeneity. Our results show positive roles of low intensification and moderate use of technological equipment in mitigating the impact of an increase of milk price volatility on dairy farm viability. These contribute to provide insights on farmers' coping strategies effectiveness and the extent to which modernization is advantageous.
    Keywords: economic viability, feologit, milk price volatility, technological tools
    Date: 2023–09–19
  4. By: Chaohua Dong; Jiti Gao; Bin Peng; Yayi Yan
    Abstract: In this paper, we consider estimation and inference for both the multi-index parameters and the link function involved in a class of semiparametric multi-index models via deep neural networks (DNNs). We contribute to the design of DNN by i) providing more transparency for practical implementation, ii) defining different types of sparsity, iii) showing the differentiability, iv) pointing out the set of effective parameters, and v) offering a new variant of rectified linear activation function (ReLU), etc. Asymptotic properties for the joint estimates of both the index parameters and the link functions are established, and a feasible procedure for the purpose of inference is also proposed. We conduct extensive numerical studies to examine the finite-sample performance of the estimation methods, and we also evaluate the empirical relevance and applicability of the proposed models and estimation methods to real data.
    Date: 2023–11
  5. By: Megan Hogan (Peterson Institute for International Economics); Gary Clyde Hufbauer (Peterson Institute for International Economics)
    Abstract: The United States and China hit record trade levels in 2022, despite a prickly relationship, suggesting that calls for severe or even total economic decoupling between the world's two economic superpowers may be ill-advised, say Hogan and Hufbauer. The dollar value of US-China trade grew significantly between 2019 and 2022, notwithstanding declines in trade flows of certain products such as semiconductors and aircraft due to the trade war. The persistence and even growth of the two countries' total trade despite political and economic disputes reflects the mutual benefit that private firms see in this commercial relationship. The authors conclude that partial decoupling between the United States and China has not, so far, redrawn the world trade map. Nor does it seem likely to do so on an aggregate trade basis between now and 2025.
    Date: 2023–10
  6. By: Janis Kudins (Daugavpils University)
    Abstract: Along with the modern phenomenon of population aging, economists are also concerned about a shift in the composition of the workforce from relatively young to relatively old workers. This study is aimed to empirically prove the hypothesis that in the modern world the economic usefulness of older workers in terms of productivity is determined, in addition to the characteristics of the el derly workforce, by factors characterizing the level of territory development. The theoretical background and methodology of this study is formed on the basis of the concept of "specific human capital" by G. Becker and the conception of endogenous growth. The author uses the latest statistics for 63 countries of the world and several methods of quantitative data analysis: correlation analysis, regression analysis and cluster analysisin order to detect not only correlational parallelism, but also causal relationships between the variables included in the proof of the research hypothesis. The results of the empirical analysis show that technological readiness, along with a high level of lifelong learning in the country, are the catalysts that ensure the economic usefulness of older workers in terms of productivity in the countries of the modern world. The author also concludes that a baseless raising the retirement age in the country, without considering the above factors that characterize the level of development of this country in technological and learning aspects, does not allow the effective use of the economic potential of older workers.
    Keywords: older workers, economic usefulness, productivity, specific human capital, endogenous growth
    Date: 2022–03–30
  7. By: Stephen Lee
    Abstract: We compare the performance of Markowitz’s mean-variance analysis based on Pearson correlation coefficients (PCC) and Partial-correlation coefficients (PACC); using monthly return data on 11 REIT sectors and the EREIT index, over the period from January 1994 to December 2022. The results of the empirical analysis show a number of features of interest. First, we find that the off-diagonal elements of the PCC matrix are significantly positive. In contrast, the corresponding off-diagonal elements of the PACC matrix, conditioned on the EREIT index, are generally insignificantly different from zero and in a number of cases significantly negative. Second, we find that PACC-based minimum-risk portfolios (MRPs) are more diversified than PCC-based portfolios. While the PAC-based weights of the MRP change significantly from period to period, the MRP weights using PACC are very stable. The stability of the PACC portfolio weights means that the weights in one period can be used in the next period, with very little increase in portfolio risk. Therefore, the extent of rebalancing is limited in PACC portfolios, which will minimise transaction costs. In contrast, the instability of the PCC-based portfolio weights means that holding the optimum weights of the MRP in one sub-period leads to portfolio risks that are on average 30% greater than with an MRP optimum solution in the next sub-period. In other words, the MRPs estimated by the PACC method are substantially better than that by PCC-based methods. We conclude, therefore that portfolios constructed by PACC are more useful and meaningful for risk management and optimal portfolio selection than Pearson correlation-based methods.
    Keywords: Mean-Variance Analysis; Partial correlations; Pearson Correlations; REIT Sectors
    JEL: R3
    Date: 2023–01–01
  8. By: OECD
    Abstract: With many countries struggling to boost the attractiveness of the teaching profession, it is important to understand the sources of teacher stress better. This brief explores data on lower secondary teachers from TALIS 2018 to investigate whether stressors vary according to students’ socio-economic background. In addition, it looks at which stressors are more likely to be associated with teachers’ job satisfaction and plans to continue in the role.
    Keywords: job satisfaction, stress, teacher retention, teaching profession, well-being
    Date: 2023–11–14
  9. By: Bauer, Anja (Institute for Employment Research (IAB), Nuremberg, Germany); Gartner, Hermann (Institute for Employment Research (IAB), Nuremberg, Germany); Hellwagner, Timon (Institute for Employment Research (IAB), Nuremberg, Germany); Hummel, Markus (Institute for Employment Research (IAB), Nuremberg, Germany); Hutter, Christian (Institute for Employment Research (IAB), Nuremberg, Germany); Wanger, Susanne (Institute for Employment Research (IAB), Nuremberg, Germany); Weber, Enzo (Institute for Employment Research (IAB), Nuremberg, Germany); Zika, Gerd (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "Die hohe Inflation, steigende Zinsen sowie eine schwache Auslandsnachfrage haben die wirtschaftliche Entwicklung in Deutschland gedämpft. Der Arbeitsmarkt wird dadurch zwar beeinträchtigt, gemessen an der schwachen Konjunktur hält er sich aber vergleichsweise gut. Der Kurzbericht gibt einen Ausblick auf die Entwicklung in den Jahren 2023 und 2024." (Autorenreferat, IAB-Doku)
    Keywords: Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; Erwerbspersonenpotenzial ; Erwerbsquote ; Inflation ; Konjunkturprognose ; Rezession ; sektorale Verteilung ; Arbeitslosenquote ; Arbeitsmarktprognose ; Arbeitsvolumen ; Arbeitszeitentwicklung ; 2017-2024
    Date: 2023–08–22

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