The Journal of Fisheries Business Administration (수산경영론집)

The Korean Society of Fisheries Business Administration (한국수산경영학회)
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A Study on the Law of One Price in Major Domestic Fishery Product Markets in South Korea: Evidence from Frozen Squid, Frozen Hair tailand Dried Anchovy

주요 수산물의 국내 소비시장에서의 일물일가법칙의 성립여부 : 냉동오징어, 냉동갈치, 건멸치를 중심으로

  • Lim, Eun-Son (Department of Economics, University of South Carolina) ;
  • Kim, Ki-Soo (Division of International Commerce, Pukyong National University)
  • 임은선 (사우스캐롤라이나 대학교) ;
  • 김기수 (부경대학교 국제통상학부)
  • Received : 2017.01.24
  • Accepted : 2017.03.22
  • Published : 2017.03.31
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Abstract

We explore each of the three major domestic fishery product markets in South Korea- Frozen Squid, Frozen Hair tail and Dried Anchovy- to assess whether we can find evidence for Law of One Price (LOP) across the five major cities- Seoul, Dae-Jeon, Dae-Gu, Gwang-Ju and Busan. To achieve our aim, we utilize two different types of unit root tests: Augmented Dickey-Fuller (ADF) and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) unit root test. In each of the three fishery product markets, we find evidence in support of LOP among several cities, which confirms that these markets are integrated to a certain extent. In particular, we find stronger evidence of LOP for Dried Anchovy market relative to the other two fishery product markets. Based on our findings, we argue that the Dried Anchovy market exhibits a greater degree of market integration across the five major cities in South Korea compared to the other two fishery product markets. The greater degree of market integration in the Dry Anchovy market is facilitated by its higher substitutability across cities; taken together these findings show that the market for Dried Anchovy in South Korea is more efficient than the markets for Frozen Squid and Frozen Hair tail.

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References

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