• Journal of Navigation and Port Research
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• v.46 no.4
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• pp.351-358
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• 2022

This study analyzed changes in the market concentration of Korean ocean-going shipping companies using shipping revenue based CR (Concentration Ratio), and HHI (Herfindahl - Hirschman Index) to examine the effects of the government's selection and concentration based the shipping reconstruction scheme. The results of this study showed that the market structure of the Korean shipping industry has changed from a competitive market to a rather concentrated market, as CR as well as HHI values have increased from 2019 to 2021. In particular, the market share of the deep-sea shipping lines has risen significantly compared to the intra-Asian short-sea shipping lines and the tramp carriers, implying that the Korean liner shipping market has become a monopoly, or highly concentrated oligopoly market. Compared to other shipping markets, the high rise in ocean freight rates (i.e. Asia-Europe America) was the leading cause of the increase in the revenues of the ocean-going shipping lines, and the increased fleet through preemptive government support has enabled them to achieve more revenues. As a result, it can be interpreted that the government's fleet expansion strategy has been more effective than expected, but it is too early to conclude if the market structure of the Korean ocean-going shipping companies has been strengthened.

• KDI Journal of Economic Policy
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• v.14 no.2
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• pp.29-54
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• 1992

Recent studies on the economic effects of trade liberalization and economic integration have emphasized the significant gains associated with product differentiation and scale economies. Securing access to markets in other countries will make it possible to increase product variety and capture scale economies, thus, expanding the gains from trade. Liberalization is also expected to introduce foreign competition into the previously closed market. Concurrently, the liberalization will improve the competitive market environment for firms selling in the domestic market. Firms will be pressed to either exit or reduce cost. The output per firm, then, will increase due to the exit of rival firms, and the average total cost will decline due to the economies of scale. 'Rationalization' of the production process will eventually follow. This paper addresses the economic effects of (counterfactual) bilateral tariff elimination between Korea and Japan. It computationally assesses the gains from liberalization as well as the resource allocations and welfare effects associated with the tariff reduction. The endogenous determination of the key parameters distinguishes this paper from others. The firm's perceived elasticity of demand and elasticity of substitution in the present model are calibrated to be consistent with the base year data. Korea, Japan, and the rest of the world are modeled explicitly. The sectoral coverage of the model includes twenty-three tradable product categories based on three-digit SITC industries and seven nontradable categories based on one-digit SITC industries. Product categories are also classified into perfectly competitive and imperfectly competitive ones. In the imperfectly competitive industries, product differentiation exists at the firm level, while the perfectly competitive industries are characterized by national product differentiation. The simulation results of bilateral tariff reduction are reported. Tariff elimination tends to increase intra-industry trade flows so that the total amount of exports and imports of both countries expand. Yet, Japan is expected to increase the bilateral trade surplus in the wake of the mutual tariff reduction. Terms-of-trade for Korea will not change, while for Japan it will deteriorate. Equivalent variations reflecting the change in consumer surplus (welfare) will favor Korean consumers. Total output, however, will not change substantially, recording 0.5 and 0.6% for Japan and Korea, respectively. An interesting finding in the analysis is that the gains from increased competition and scale efficiency are not as prevailing as expected in theory.