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Inter-industry analysis in the Korean flow-of-funds accounts

Author

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  • Jiyoung Kim

    (Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO))

Abstract

This study mainly aims to provide an inter-industry analysis through the subdivision of various industries in flow-of-funds (FOF) accounts. Combined with the Financial Statement Analysis data from 2004 and 2005, the Korean FOF accounts are reconstructed to form “from-whom-to-whom” basis FOF tables, which are composed of 115 institutional sectors and correspond to tables and techniques of input–output (I–O) analysis. First, power of dispersion indices are obtained by applying the I–O analysis method. Most service and IT industries, construction, and light industries in manufacturing are included in the first-quadrant group, whereas heavy and chemical industries are placed in the fourth quadrant since their power indices in the asset-oriented system are comparatively smaller than those of other institutional sectors. Second, investments and savings, which are induced by the central bank, are calculated for monetary policy evaluations. Industries are bifurcated into two groups to compare their features. The first group refers to industries whose power of dispersion in the asset-oriented system is greater than 1, mainly light industries, IT, and service. On the other hand, the second group indicates that their index is less than 1, mostly heavy and chemical industries. We found that the net induced investments (NII)–total liabilities ratios of the first group show levels half those of the second group since the former’s induced savings are obviously greater than the latter.

Suggested Citation

  • Jiyoung Kim, 2017. "Inter-industry analysis in the Korean flow-of-funds accounts," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-27, December.
    • Handle: RePEc:spr:jecstr:v:6:y:2017:i:1:d:10.1186_s40008-017-0084-9
    DOI: 10.1186/s40008-017-0084-9
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    References listed on IDEAS

    as
    1. Kazuo Ogawa & Elmer Sterken & Ichiro Tokutsu, 2012. "Financial Distress And Industry Structure: An Inter-Industry Approach To The Lost Decade In Japan," Economic Systems Research, Taylor & Francis Journals, vol. 24(3), pages 229-249, April.
    2. Matías Braun & Borja Larrain, 2005. "Finance and the Business Cycle: International, Inter‐Industry Evidence," Journal of Finance, American Finance Association, vol. 60(3), pages 1097-1128, June.
    3. Lawrence Klein, 2003. "Some Potential Linkages for Input-Output Analysis with Flow-of-Funds," Economic Systems Research, Taylor & Francis Journals, vol. 15(3), pages 269-277.
    4. Leo De Haan & Elmer Sterken, 2006. "The impact of monetary policy on the financing behaviour of firms in the Euro area and the UK," The European Journal of Finance, Taylor & Francis Journals, vol. 12(5), pages 401-420.
    5. Jiyoung Kim & Satoshi Nakano & Kazuhiko Nishimura, 2016. "Multifactor CES General Equilibrium: Models and Applications," Papers 1608.01365, arXiv.org, revised Jan 2017.
    6. Kim, Jiyoung & Nakano, Satoshi & Nishimura, Kazuhiko, 2017. "Multifactor CES general equilibrium: Models and applications," Economic Modelling, Elsevier, vol. 63(C), pages 115-127.
    7. Morris A. Copeland, 1952. "A Study of Moneyflows in the United States," NBER Books, National Bureau of Economic Research, Inc, number cope52-1, July.
    8. Kazusuke Tsujimura & Masako Mizoshita, 2003. "Asset-Liability-Matrix Analysis Derived from the Flow-of-Funds Accounts: The Bank of Japan's Quantitative Monetary Policy Examined," Economic Systems Research, Taylor & Francis Journals, vol. 15(1), pages 51-67, March.
    9. Corbett, Jenny & Jenkinson, Tim, 1996. "The Financing of Industry, 1970-1989: An International Comparison," Journal of the Japanese and International Economies, Elsevier, vol. 10(1), pages 71-96, March.
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    Cited by:

    1. Tao Sun, 2024. "Systemic importance of financial services and insurance sectors: a world input–output network analysis," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 49(1), pages 63-96, January.

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    More about this item

    Keywords

    Inter-industry analysis; Flow-of-funds; Monetary policy evaluation;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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