Yusik Andrew Kim

I am a PhD candidate in Economics at the University of Texas at Austin.

I will be joining the Federal Reserve Board as an Economist in the summer of 2025.

My research focuses on Industrial Organization and Finance.

View my CV: here

Email: andrew.yusik@utexas.edu

WORKING PAPERS

Screening in Loan Guarantee Programs: Combining Contract Menus with Information Collection (Job Market Paper)

To support credit-constrained small businesses, governments use loan guarantee programs that insure lenders against default risk. However, these programs face challenges in allocating appropriate loan sizes due to limited information about small businesses. This paper explores the welfare implications of using a loan guarantee menu as a screening mechanism to address such challenges, in the context of the South Korean loan guarantee program. I investigate how offering a loan guarantee menu alongside soft information collection (e.g., interviews and site visits) encourages borrowers to reveal their private information, thereby enabling the government agency to make more informed loan size decisions. The study evaluates how these screening mechanisms impact both the economic output of small businesses and the financial losses incurred by the government, as captured by the agency's objective function—a combination of these two outcomes. I find that a loan guarantee menu is effective on its own, increasing the value of the agency's objective function by 3.9%. When combined with soft information collection, its impact is significantly enhanced, leading to an 8.7% increase. This complementarity arises because efforts to collect soft information encourage borrowers with varying risk profiles to self-select into appropriate contracts, thereby leading to more efficient loan allocations.

Why the Online Shopping Trend Will Stick: Switching Costs from In-Person to Online Shopping (Draft Available Upon Request)

E-commerce has been gaining importance in the retail sector, yet the switching cost consumers incur when transitioning from traditional brick-and-mortar stores to online shopping platforms has been largely ignored. This paper investigates the magnitude of switching costs to online shopping in the context of the carbonated drinks industry in South Korea, exploiting variations in COVID-19 severity across regions and over time as a natural experiment. Employing a discrete choice model to quantify these costs, I find the switching cost from in-person to online shopping to be nearly 3.3-3.8 times the average beverage price—far surpassing the costs linked to switching brands. The pandemic has compelled consumers to absorb these high costs, suggesting that they will likely continue utilizing online shopping. Our analysis indicates that this shift towards online shopping is not a temporary adjustment but a long-term change in consumer behavior, suggesting a lasting transformation in retail dynamics and an increase in consumer welfare.

WORK IN PROGRESS

Impact of Loan Sizes on Small Businesses: Evidence from a Public Loan Guarantee Program with Hyuntae Choi and Gyeahyung Jeon

We examine the heterogeneous impact of loan size on small businesses within South Korea's public loan guarantee program, using a regression discontinuity design at various credit grade cutoffs. Leveraging the credit grading system in place until 2020, our analysis reveals significant differences in loan sizes provided to businesses just above these credit grade thresholds compared to those just below, despite their similar characteristics. We specifically explore how these variations in loan size influence business performance across different types of businesses, aiming to shed light on effective loan allocation in small business lending.

Market Diversification through Exporting, and its Impact on R&D Spillovers

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