A Comparative Study of Korea and Japan on Export Insurance for Export Promotion

한.일 수출보험과 수출촉진에 관한 비교연구

Because Korea and Japan has joined WTO and OECD, it is impossible to carry out a direct export-promoted policy such as export subsidies. Therefore, the only policy which is internationally valid for promoting an export is the export insurance. Hence export insurance system became more useful tool since it's one of the few allowed subsidies under WTO. This paper examines to find the impacts of export insurance on the export supply in Korea and Japan. The period of data is from 1980 to 2006. Unlike previous studies on the effectiveness of export subsidy in export supply, the current study examines the stationarity nature of the concerned variables. The unit root tests show that all variables are not I(0) Time Series. Instead, they are I(1) Time Series. To this, cointegration verification was conducted based on the use of Johansen verification method to define the existence (or non-existence) of long-term balance relationship among variables. The concerned variables are revealed to be cointegrated. In order to analyze, this study introduce a VEC model. In this paper we construct two VEC models. The one is about Korea, the other is about Japan. The empirical evidences show that export insurance system has not contributed to promoting export supply in Japan. But the results of empirical analysis showed significant and positive effects of Korea export insurance upon the export supply.