• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.77
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• pp.195-214
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• 2018

In order to analyze the current status of trade with Korea and FTA partner countries, the Trade Intensity Index and the Market Comparative Advantage index were calculated and analyzed using panel gravity model. In the case of trade, trade intensity index has been strengthened according to each FTA enforecement, and in some cases, trade inensity has been weakened. In the case of the comparative advantage index, there was a case in which the comparative advantage was strengthened or the comparative advantage was not significantly changed according to each Chapter of HS code. This means that the Korea's FTA enforcement effect has not directly affected the increase of the trade intensity and the increase of the market comparative advantage index. The panel gravity model using the trade intensity and the comparative advantage index as the dependent variable and the trade volume between the two countries as the dependent variable was analyzed.

• Fashion, Industry and Education
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• v.14 no.1
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• pp.1-9
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• 2016

This study examined the comparative advantage of manmade textile (MMT) industries in the United States (US) and South Korea (SK). The Revealed Comparative Advantage (RCA) framework was used to assess the MMT industries' performance in both countries from 2004 to 2013. With the recent ratification of the United States-South Korea Free Trade Agreement (KORUS FTA), it is important to understand the current state of these industries. Using UN Comtrade export data, the RCA index values were calculated and analyzed for 27 MMT commodities, three aggregate groups, and the whole industry. It was found that SK had a consistent comparative advantage for the whole industry. Furthermore, SK had a larger number of products with a comparative advantage. The research findings indicate that the MMT industry in SK is likely to outperform the US following the complete ratification of the KORUS FTA.

• East Asian Economic Review
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• v.22 no.1
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• pp.75-114
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• 2018

A two-part model is estimated to see if increasing returns and comparative advantage are empirically equivalent in explaining intra-industry trade. The model has separate mechanisms for determining the occurrence and the extent of intra-industry trade. Estimation is based on an augmented Grubel-Lloyd index derived from the data set on SITC 7 goods at the 3-digit SITC (Revision 4) for country pairs in which Korea is fixed as a source country. Estimation results show that both increasing returns and comparative advantage can explain the occurrence and the extent of intra-industry trade.

• Korea Trade Review
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• v.41 no.1
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• pp.159-186
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• 2016

This study analyzes the degree of dependency and comparative advantage of each country for intermediate goods trade in East Asia, which predicts the comparative advantage of the intermediate goods trade and fragmentation in East Asia when the FTA arrangement in East Asia is implemented. The results are as follows. First, the share of intra-regional trade in the intermediate goods in East Asia has increased over time, implying the deepening of interdependency in intermediate goods trade within the East Asia. Second, Korea is a net exporter in intermediate goods trade for China and ASEAN, whereas it is a net importer for Japan. Japan is a high net exporter for all East Asia, while China is a net importer for Korea, Japan and ASEAN. If FTA arrangement in East Asia is implemented, Japan and Korea will be key suppliers of the intermediate goods for East Asia, while China and ASEAN will play a role of the manufacturing factory through the import of intermediate goods. Third, Korea has a comparative advantage in intermediate trade of electric and electronics and transport vehicle industry in East Asia. Japan has a comparative advantage in all of electric and electronics, transport vehicle, precision instrument, general machinery industry, whereas China has a comparative advantage only in electric and electronics intermediate trade in East Asia. The intra-industry trade of the intermediate goods in precision instrument, general machinery industry is expected to grow among Korea, Japan and China.

• Journal of Korea Port Economic Association
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• v.31 no.3
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• pp.141-153
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• 2015

This paper is an attempt to analyze the comparative advantage of Busan Port to China. For this, we use the market comparative advantage index, which is a version of the revealed comparative advantage index. The market comparative advantage index (MCA) uses trade patterns to identify the sectors in which a region has a comparative advantage, in this case by comparing Busan Port's trade profile with the world average (China). The indices are calculated at the commodity level of the HS four-digit classification. The export data used in this study are obtained from the Korea International Trade Association. Exports to China accounted for almost one third of Korean exports in 2014. There are, however, structural differences among the main export items of Busan Port. This paper, therefore, employs MCA indices to reveal the behaviors of the ten main export items, which are "HS3920-other plates/sheets/film/foil of plastics," "HS7606-aluminum plates/sheets/strip," "HS8479-unspecified machines/medical appliances," "HS8486-machines for semiconductor devices or wafers," "HS8529-parts for transmission apparatus for television," "HS8703-motor vehicles for the transport of persons," "HS8708-parts of motor vehicles," "HS9001-optical fibers," and "HS9013-liquid crystal devices." The study shows that export competitiveness of nine items increases, the exception being HS8703. However, China's import ratios of seven of the nine items for which the MCA indices go up are on the decrease, which means that it would be hard to expand the export market for these seven items, despite the higher MCA indices. Since the shares of the port's total exports to China of HS3907, HS8486, HS8529, HS9001, and HS9013 in total exports to China increase together with China's import ratio decreasing, these items may have promising export markets. MCA increases of HS7606 and HS8479 are attributable to China's lower import ratio, rather than a higher export share, so higher MCA indices do not guarantee higher export competitiveness for these items.

• Journal of Distribution Science
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• v.13 no.6
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• pp.35-44
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• 2015

Purpose - To accelerate economic cooperation, this study investigates trade structures of Korea and the United States and identifies trade discrepancies. Such discoveries can lead to increases in trade volume by improving policies, eventually uncovering ways for trade expansion. Research design, data, and methodology - The Index of trade intensity, from trade intensity theory, is used to analyze the trade decision factors. Even though specific factors should materialize in the analysis, realistically, concrete explanations are difficult as there are so many unsolved factors and diversifications. Results - First, the Index of A value/ B value positions Korean against the United States in terms of market share and Korea against world market share, which thereby reveals comparative market intensity. Second, Korea is taking comparative advantage of export specialization. Third, real comparative advantage indices are considerably improved since early 2000. Conclusions - This study uses quantitative measurements and trade intensity theory and trade specialization to come up with a comparative advantage index to see how inter-trade relations between Korea and the United States have changed over the past 10 years.

• Journal of Distribution Science
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• v.11 no.11
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• pp.33-40
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• 2013

Purpose - This study, in seeking to understand the trade structure of both Korea and China, aims to strengthen Korea-China economic cooperation; it examines trade impediments by analyzing the problems affecting trade and addressing these problems, thereby discovering ways to expand trade between these countries. Research Design, Data, and Methodology - The index of trade intensity developed by the trade intensity theory (Kruger, 1997) is used to analyze the trade decision factors of both countries. Although specific factors should have materialized from the analysis of trade decision factors, determining concrete explanations is difficult in reality, as there are many unsolved and diverse factors. Results - First, the index of A value/B value is the index of Korean versus Chinese market share/Korean versus world market share, which is a measure of comparative market intensity. Second, Korea has a comparative advantage in export specialization and, conversely, China has a comparative advantage in import specialization. Third, compared to 2000, the revealed comparative advantage (RCA) indexes are considerably improved. Conclusions - This study used quantitative measurement for analysis, applying trade intensity theory, trade specialization, and RCA indexes to gauge how inter-trade relations have changed between Korea and China during the past 10 years (2000, 2005, and 2012).

• Journal of Korea Port Economic Association
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• v.33 no.3
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• pp.91-104
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• 2017

This paper examines the export structure of Gwangyang Port and evaluates its comparative advantage from 2005 to 2016 using the Comparative Advantage by Countries (CAC) index. It is found that: (i) Gwangyang Port has a comparative advantage in HS 39 and HS 28, an unstable comparative advantage in HS 29 but a comparative disadvantage in HS 72; and (ii) 4 items have the common features of losing their comparative advantage. Constant market share analysis allows one to evaluate why the exports of one region may grow faster than world exports. This consists of the commodity composition effect, the scale effect, and the competitive effect. Constant market share analysis shows that the commodity composition effect influences exports negatively while the scale effect does exports positively. Shift-share analysis can help evaluate the change in a region's performance relative to the nation over a given period of time. The result indicates that HS 28 has not only favorable industrial mix effect but high competitive share effect, while HS 29 has unfavorable industrial mix effect as well as low competitive share effect. This paper also reveals that industrial mix effect of HS 39 is positive but its competitive share effect is negative, whereas the former is negative but the latter is positive in case of HS 29.

• International Area Studies Review
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• v.12 no.3
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• pp.467-492
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• 2008

This paper analyzes the specific product-basis trade structure between Busan and Japan using the recent 2000-2007 trade statistical data. Several specific product-basis trade structure tests such as intra-industry trade index and market comparative advantage index show that there are considerable differences in intra-industry trade structure between Busan and Japan. Furthermore, this paper found that Busan has high quality vertical intra-industry trade and horizontal intra-industry trade as well as low quality vertical intra-industry trade in trading with Japan. While Busan has the market comparative disadvantage in automobile-part products in Japan. This paper also examines the contribution to trade balance of Busan's exports and the movement of Busan's comparative advantage patterns in Japan. The comparative advantage appears to have overall stability and convergence properties using symmetric indices.

• Journal of Distribution Science
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• v.12 no.3
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• pp.25-32
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• 2014

Purpose - This study reviews changes in the steel export-import structure between Korea and Japan using a trade related index; it focuses on analyzing comparative advantage based on time-series analysis statistics data using the trade intensity index (TII), revealed comparative advantage index (RCA), and trade specialization index (TSI). Research design, data, and methodology - In terms of their economic phase, Korea and Japan have a mutually complementary character. Therefore, this study aims to understand each country's trade structure to strengthen Korea-Japan economic cooperation, examine trade drawbacks, analyze factors that affect trade, and identify ways to improve and expand trade. Results - The results indicate immense potential for mutual cooperation and complementariness, which will yield guaranteed adequate profits comparable to those of any regional economic integrated community. Conclusion - From our viewpoint, Northeast economic cooperation can facilitate industry technological cooperation with Japanese partners in the prevailing environment that is characterized by increasing competition among industries and the need to secure stable resource supplies as well as the expansion of the export market and diversification, which can have significant positive implications.