KOR

Research Staff

Research Staff

Profile

Education
Ph.D. in Economics (2017), University of Illinois at Urbana-Champaign
M.A. in Economics (2009), Ewha Womans University
B.A. in Economics (2005), Ewha Womans University

Publications

Opinion

ESG Levels in Korea’s ESG Funds: Analysis and Implications / Sep. 15, 2020
Amid the abrupt increase in the size of ESG investing globally, Korea has seen a rush of ESG-themed funds in its asset management industry. However, there have been persistent claims that funds under the ESG label often fail to differentiate themselves from ordinary equity funds. An analysis on Korea’s equity ESG funds in this article reveals that average ESG levels of ESG fund portfolios are not significantly different from those of ordinary equity funds, and that ESG levels widely differ across ESG fund portfolios. As this could undermine investor confidence in ESG funds and activities in the ESG fund market in a long run, Korea’s financial investment industry should exert every effort to differentiate ESG-themed products, while seeking to enhance transparency in ESG funds.
Global ESG Investment: Recent Trends and Major Discussions / Mar. 17, 2020
Recently, there has been growing interest in ESG investing that incorporates non-financial factors such as environmental, social, and governance aspects into investment decisions. ESG investing has picked up particularly among institutional investors and large-scale pension funds who prioritize sustainability and long-term performance over short-term returns. Backed by the trend, ESG assets under management have ballooned rapidly. On another front, however, ESG investing has been the subject of concern over its financial performance, rating consistency, and a proper disclosure scheme. As ESG investing is expected to grow its importance in Korea with the National Pension Fund’s move towards more socially-responsible investing, it’s desirable to channel more efforts into assessing ESG investment performance on an on-going basis, building more track records, standardizing the ESG rating scheme, and making improvements on disclosure.
Funding of Retirement Benefit Liabilities and Corporate Credit Risk / Oct. 08, 2019
Retirement pension benefits embed a reward promise that employers pay to the employees for the past service at the time of retirement, and therefore are employers’ implicit liabilities. To guarantee employees’ right to receive the benefits, it is required that employers keep a statutory ratio of pension assets over pension liabilities, and that the pension liabilities are paid before other unsecured claims if employers go bankrupt. Hence, a company whose funding position is low might see its future cash flows fall, its default risk of other debt rise, and in the end its credit rating be downgraded. This article analyzes the correlation between funding ratios and credit risk of listed companies in Korea for a period between 2011 and 2018. The result indicates that firms with a higher funding position tend to have a higher credit rating, and that the correlation remains significant when controlling other factors that are known to affect the ratings, such as the firm size, debt ratio, profitability, growth potential, etc. At a time when Korea sees retirement pension assets balloon rapidly, such an analysis result throws an important implication: Employers, a key decision maker in contributing and managing retirement benefits, should be more proactive to pay more attention to the management of plan assets.
Japan’s E-Voting for Shareholders: Current State and Implications / Jan. 29, 2019
The end of the shadow voting scheme gave rise to the failures to pass resolutions at shareholder meetings due to lack of a quorum mainly for listed firms with a high proportion of individual shareholders. This serves as an impediment to the smooth running of shareholder meetings. In this situation, electronic voting (e-voting) is recently receiving intense attention as an alternative tool to normalize the operation of shareholder meetings. E-voting enables shareholders who are unable to attend the meeting in person owing to time and location constraints to exercise their voting rights, which is eventually expected to help facilitate shareholder meetings. Since Korea introduced the e-voting system in 2010, it has seen a steady rise in the number of companies entering into agreements to use e-voting service. Nevertheless, the proportion of the companies actually using e-voting still remains low. Meantime, Japan adopted the e-voting system ahead of Korea and made continued efforts to encourage the use of e-voting. Consequently, it has reaped tangible results including an increase in the percentage of institutional investors participating in e-voting and lower concentration of shareholder meetings on certain dates. Learning from Japan’s case, Korea needs to improve institutional arrangements for foreign institutional investors to take part in e-voting, for example, by revamping the method to verify the identity of shareholders, allowing shareholders to cancel or modify their votes cast electronically, and strengthening the disclosure of shareholder meeting results.

Research performance