DOI QR코드

DOI QR Code

Impact of US-China Trade War on Stock Price of Korean Exporting Firms

미·중 무역분쟁이 한국 수출기업 주식가격에 미치는 영향

  • Yoo-Kyung Won (PNU EU Centre, Pusan National University) ;
  • Chae-Deug Yi (Department of International Trade, Pusan National University)
  • Received : 2020.02.11
  • Accepted : 2020.02.26
  • Published : 2020.02.28

Abstract

As the US's trade deficit with China and China's manufacturing industry has risen rapidly, the US has begun to regulate trade items as part of China's checks. Four rounds of reprisal measures have greatly altered the trade structures of both countries. In particular, Korea, which is highly dependent on the US and China, has been directly affected by US-China trade disputes. The purpose of this study was to analyze the effects of US-China trade disputes on the stock price of Korean export firms by performing an event study. This study analyzed stock price fluctuations for 7 days before and after entry into forced [Please check] retaliatory tariffs on Korean exporters' export items subject to retaliatory tariffs. According to the analysis results, among companies that produce goods with major tariffs imposed on China by the US, such as electronic appliances, semiconductors, machinery, and automobiles, those producing electronics and semiconductor products were positively affected by the tariff incident. Secondly, among the companies producing steel, chemicals, and machinery, which the main tariffs imposed by the United States, companies producing steel and chemicals were negatively affected by the incident due to the stagnation of trade between China and the US. The results of this study suggest future trade policy directions for Korea and help to establish an export strategy for major industries.

Keywords

Acknowledgement

이 논문은 2019년 대한민국 교육부와 한국연구재단의 지원을 받아 수행된 연구임(NRF-2019S1A5A2A01052174)

References

  1. Autor, D. H., Dorn, D. and Hanson, G. H .(2013), "The China syndrome: Local labor market effects of import competition in the United States", American Economic Review, 103(6), 2121-2168. https://doi.org/10.1257/aer.103.6.2121
  2. MacKinlay, A. C.(1997), "Event Studies in Economics and Finance", Journal of Economic Literature, 35, 13~39.
  3. Choi, Sung-Hee, Ki-Dong Lee and Jong-Il Choe(2012), "Event Study Methodology and Exchange-rate Exposure of Regional SEMs : A Case of Daegu, Gyeongbuk, Busan, and Gyeongnam SMEs", Journal of Korean Economy Studies, 30(2), 67-90.
  4. Fama E. F, L. Fisher, M. C. Jensen, R. Roll(1969), "The Adjustment of Stock Price of New Information," International Economic Review, 10, 1-21. https://doi.org/10.2307/2525569
  5. Healy, P. M., K. G. Palepu(1988), "Earnings information conveyed by dividend initiations and omissions", Journal of financial Economics, 21(2), 149-175. https://doi.org/10.1016/0304-405X(88)90059-1
  6. Im, Byeong-Ho and Jun-Yeop Lee (2018), "Analysis of US-China Trade Conflict: Value-added in Trade Perspective", The Journal of Humanities and Social science, 9(4), 1233-1248.
  7. Jung, Min, Joon-Pyo Hong and Jae-Jin Han(2018), Implications and Implications of Trade Wars on China's Exports to the United States(Weekly Economic Review 18-27), Hyundai Research Institute.
  8. Kim, Chan-Woong and Kyung-Won Kim (1997), "Measuring Security Price Performance in Event Studies", Korean Journal of Financial Studies, 20, 301-326.
  9. Kim, Hong-Youl(2019), "US-China Trade War and Game Theory in Asymmetric Bargaining Power", Korean Trade Review, 44(3), 105-121.
  10. Kim, Wan-Joong(2015), "The Impact of China and the United States on the Korean Economy", Korean Trade Review, 40(1), 59-87.
  11. Korea International Trade Association Statistics, [Online]. Available from http://stat.kita.net
  12. Lee, Chang-Soo and Back-Hoon Song (2018), "Korea's Contents in China's Exports to the US and Its Implications to Korean Exports: The Effects of Trump's Tariffs on China", Journal of International Trade and Industry Studies, 23(4), 1-21.
  13. Lee, Han-Kyung and Jin-Su Kim (2015), "An Announcement Effect of Korea Best Brands by Interbrand on Korea Equity Market", International Journal of u- and e- Service, Science and Technology, 8(12), 227-236.
  14. Lee, Ji-Yong (2019), "Shifting U.S. China Policy and Sino-U.S. Trade Dispute", Korea and World Politics, 35(2), 183-212. https://doi.org/10.17331/KWP.2019.35.2.006
  15. Lee, Jung-Yoon and Tae-Hyung Oh (2012), "The Study on the Effect of Public Certification System on Logistics Company's Stock Price", Korean Journal of Logistics, 20(2), 93-106. https://doi.org/10.15735/KLS.2012.20.2.007
  16. Moon, Byung-Ki, Sung-Eun Kang and Seo-Kyeong(2019), Export Impacts of US-China Trade Disputes(Trade Focus 24), KITA.
  17. Scott, R. E.(2005), "U.S.-China Trade, 1989-2003: Impact on jobs and industries, nationally and state-by-state", EPI Working Paper #270.
  18. Shin, Kot-Bi, Mi-Ryung La and Hyuk-Ju Kweon(2018), Impact of US-China Trade Disputes:Mainly on the imposition of mutual tariffs under Article 301(World Economy Today 18-35), KIEP.
  19. Seo, Chang-Bae(2018), "The Causes and Five Main Variables of US-China Trade War", Korean-Chinese Social Science Studies, 49, 91-113.
  20. Son, Back-Hoon and Chang-Soo Lee(2018), "CGE Analysis of the US-China Trade War and Policy Implications to the World Trade", Korea Trade Review, 43(5), 47-66.
  21. Wang, Yun-Jong(2019), "U.S.-China Trade Conflict and Its Impact on Northeast Asia's Trading Order", The Journal of Northeast Asian Economic Studies, 31(1), 1-40.